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Bequest is a money term you need to understand. Here’s what it means.
What is a bequest?
A bequest is described as the “act of giving or leaving something by will.” There are two general types of bequests: specific and general. A specific bequest is something that is expressly identified, such as a piece of art or a car. A general bequest represents a gift from the general assets of an estate. For example, if your father’s will stated that he wanted all of his possessions sold and the assets divided evenly between his four children, that would be a general bequest.
While people sometimes think of bequests in terms of cash only, a bequest also can include stocks, bonds, jewelry, a coin collection or any other item the person who died found valuable. The point of writing a will is to make sure the people you care about receive possessions that can enrich their lives.
Bequests are broken down into at least two more categories:
- Charitable bequests leave assets to a group that serves an educational, political, religious or other social purpose. A tangible advantage of charitable bequests is that they may reduce taxes owed by the estate.
- A demonstrative bequest is a gift of money that is paid from a particular source. For example, a will may state that the proceeds from the sale of stock from a designated corporation be left to a specific individual.
Example of bequest
While most bequests are clear cut, there are circumstances under which a bequest becomes conditional. For example, if a grandfather leaves each of his grandchildren $20,000 under the condition that they graduate from a four-year university, the bequest would be conditional.
As unfair as the conditional bequest may seem to heirs, courts attempt to honor the will-writer’s intent. As long as the condition does not require a beneficiary to break the law, it normally will stand up in court.
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