As a probate attorney located in Summerville, South Carolina, I often deal with will bequests. Will bequests are gifts made through a last will and testament or a living trust. It is essential that bequests are made in your will to ensure your personal property is distributed as intended. In this article, I will define a will bequest and explain the different types of will bequests in South Carolina.
What Is a Will Bequest in South Carolina?
A will bequest is a gift of personal property such as money, bonds, stock, jewelry, etc., owned by the decedent at the time of death and is directed by the provision of the will. A bequest is defined as a gift by last will or testament to a legacy. Legacy refers to an amount of money or property left to someone in a will. Historically, legacy referred to either a gift of real property or personal property. Real property can be described as tangible landed property or incorporeal hereditament. Personal property can be described as everything that does not come under real property.
Legacy is synonymous with the word bequest although some people make the distinction that legacy refers to money whereas bequest refers to property. In addition, legacy is sometimes also used to refer to any testamentary gift irrespective of whether they are personal property or real property.
It is important to note that bequest is also often used synonymously with devise but there is a distinction between the two. A bequest is applied by the will of a legacy of personal property. Devise, on the other hand, is a gift by testament.
What are the Various Will Bequests in South Carolina?
Specific Bequest. A specific bequest or devise is a testamentary gift of a specific item of property, such as a car, that can be easily identified and distinguished from all other property in the testator’s estate. Occasionally, a person will want to leave a little something to a friend or charity, and the remainder to the family. This can be done with a specific bequest, such as, “$1,000 to my friend Beverly Ross.” However, there could be a problem if, at the time of the person’s death, there was nothing remaining after the specific bequests.
For example, at the time of making the will, the decedent had $2,000,000 in assets. He left $60,000 to a local hospital, $50,000 to a local group that took care of the homeless, and the remainder to his children. Unfortunately, prior to his death, the value of the stock had declined. When he passed away, the estate was worth only $200,000, so after the specific bequests have been satisfied and the legal fees and expenses, there was nothing left for his children.
Another problem with specific bequests is that some of the property may be worth considerably more or less at death than when the will was made.
For example, the decedent wanted her two children to equally share the estate. Her will left her son stocks worth $500,000 and his daughter $500,000 in cash. When she passed away, the stock was only worth $50,000. This could have been avoided had she left 50% of the estate to each of her children.
Given the specificity, another item cannot be substituted to satisfy the bequest, should the item no longer exists. A specific bequest can also take the form of property located at a particular location, although the exact amount of the gift is unclear. For example, the decedent willed his brother the contents of a safe deposit box at Union Bank and Trust in downtown Detroit, Michigan.
Direct gifts of a particular stock can also cause problems. As anyone who follows the stock market knows, stocks are subject to radical value fluctuations. Additionally, splits, dividends and mergers are common. To further clarify the testator’s intentions regarding stock bequests, some additional language may be worthwhile. For example, the decedent made the following bequest in his will: “I bequeath to my niece, Campbell, all of the stock, if any, in Acme Corporation or its successor whether by a change of name, consolidation, merger or otherwise, owned by me at the time of my death.”
Since the Acme Corporation had merged with Widget Industries, Acme no longer existed. Instead, the company is now known as Acme Widget Inc. The added verbiage to the will bequest allowed the smooth disposition of the stock if the decedent still owns the stock at his death. Tracing a name change is much easier than determining what stock the decedent meant to distribute.
General bequest. A general bequest is a precise dollar amount not designated from any asset. In making such a bequest an attorney should evaluate the need to adjust it should the value of an estate increase or decrease. For example, if a client is concerned that his or her assets may dissipate, the attorney can draft language tying in the bequest to a percentage of the estate as a limit. As such, if the size of the estate decreases substantially, the bequest can be adjusted downward as well. This drafting philosophy is important in protecting the distribution to the residuary beneficiaries who are typically the most important to the client.
Demonstrative Bequest. A demonstrative bequest is a gift of a certain amount of property from a specific source or a particular fund. For example, the decedent bequests in her will that her nephew shall receive $100,000 and is to be paid from the proceeds from the sale of her estate. The amount is certain and the source is specified. A demonstrative bequest possesses characteristics of both a specific and general bequest in that it is subject to ademption or partial ademption if the property or fund from which it is to be paid is no longer in existence at the time of the testator’s death.
Ademption is the term used when the decedent no longer owns the property that he or she is giving away. For example, if the decedent sold the bequested property at 1 Grove Street shortly before his or her death and purchased 2 Grove Street, then the intended recipient will get nothing. Because the decedent did not own 1 Grove Street at the time of his death, he cannot possibly will the property to the intended recipient and is considered to be adeemed.
Another issue with ademption occurs when an agent under a power of attorney sells the property. Then, it will depend upon the state whether the beneficiary gets something or not as some states require that the beneficiary receive an amount equal to the fair market value of the property. Many probate attorneys prefer not to specifically name anyone as the beneficiary of the real estate or other large ticket items. If the client insists, some probate attorneys may require that they make known what they would want to do if the property is sold before they die.
Unlike a specific bequest, if the property is disposed of before the testator’s death, the beneficiary will receive the gift from the general assets of the estate.
Residuary Bequests. A residuary bequest is a gift of the remaining assets after making distributions of a specific bequest. Specifically providing that all of the remaining property will be distributed when claims against the estate and specific, general, or demonstrative legacies and bequests have been satisfied. A residuary bequest as to personal property carries not only everything not attempted to be disposed of, but everything which turns out not to have been effectually disposed of, as void legacies and lapsed legacies.
Estate Administration can be a bit complex, so make sure you contact an experienced probate attorney. Protect your loved ones and create a last will and testament. A will allows you to decide how your estate should be distributed. Should you have any questions about wills and estate planning, contact the Watts Law Firm today.