Bequests and legacies

It is completely understandable wanting to leave a little part of your estate to everyone you love. In some cases leaving a small gift can avoid hurt feelings as it makes everyone feel included which can reduce the likelihood of a hurt relative contesting the will. If you want to give a specific item or amount of money to someone you can do this by writing them into your will as a bequest or legacy.

It is important however to carefully consider what you are going to be leaving and to whom. You should take the proper consideration when leaving legacies or bequests. It may be tempting to leave a little something for everyone but this, in certain circumstances, can make the administration of your estate unnecessarily complicated and time consuming. Having a lot of beneficiaries comes with a lot more chances of disagreements and complications, you should restrict gifts to those that you really want not to everyone you know.

There are 2 types of gifts you can leave in your will, a specific possession (often referred to as a bequest) and a specified amount of cash money (often to referred to as a legacy) although the two terms are often used interchangeably.

Bequests

Leaving possessions as a bequest is usually a simpler process then when the gift is cash money. Gifts of personal possessions can often be distributed earlier than Cash gifts as in most cases the executor will have immediate access to the items if they were kept in the deceased’s home. Items of sentimental value rather than monetary can also be passed earlier on to the named beneficiary as there is not the need to have them valued and recorded for probate and inheritance tax purposes.

An executor should however record when the beneficiary accepts their bequest and have that beneficiary sign to say they have received their inheritance. Doing this will help prevent them from claiming at a later date that they never received what they were left and claiming compensation from the executor or estate. The more bequest’s you leave the more items and beneficiaries your executor will have to locate and provide the appropriate documentation for, this can be time consuming for your executor or solicitor.

Legacies

A Cash legacy is handled differently than a possession bequest, cash legacies are most often paid after probate has been granted (if applicable) and the assets have been collected but before any other type of beneficiary. Legacies do not get priority over debts and liabilities but they do have priority over other types of beneficiary that is why they are paid closer to the end of the process than a possession bequest. If there is nothing left in the estate after the funeral, debts and estate administration then none of the beneficiaries will inherit.

Just as with a cash legacy, a bequest must be recorded by the executor for the estates accounts as well as signed for by the inheriting beneficiary. The more cash legacies there are the more complicated and time consuming this process can be. I have seen Estates where there has been so many cash legacies that the there was nothing left in the estate for the residual beneficiaries to inherit which was not the intention of the testator, unfortunately not enough consideration was put into this potential possibility when writing the will.

An added complication to leaving Cash Legacies in your will is when the intended beneficiary is under 18 at the time of inheriting. Depending on the value of the legacy or the terms in the will it may be necessary for a trust to be set up for the minor. Trusts can be tricky, time consuming and expensive so it is important when writing your will that it is worded clearly and that the instructions for distribution are as efficient as possible. This will help prevent executors having to set up complicated trust for minors when they may have been avoidable by different wording or distribution.

Bequest or Legacies to Charities

It is not uncommon that people will leave a donation to their favourite charity or charities upon their death and although done with the best intentions this can cause various forms of complications for the executors. Some charities can be quite assertive in their pursuit of what is owed to them, this sometimes is not done in the most sympathetic manner. This can make the executor feel pressured to rush the administration or pay the legacy too early which can cause problems later on. It is worth noting that it is better to leave a specified amount to a charity in your will than a percentage or share, as once they have received their gift they will have no further interest in the estate.

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