A specific gift is a tangible item – such as a property you own or a particular sum of money – that you choose to give to a particular individual in your Will. It might be that you state in your Will that you want to leave a specific property to your child, for example.
But what happens if you no longer own that property at the time of your death?
There are several ways this could occur.
You may have sold the property to buy another one and forgot to update your Will, or – if for some reason you were deemed incapable of making your own decisions – it may have been sold on your behalf (to pay for residential care, for example).
Either way, if you no longer own the property (or any specific gift) at the time of your death, then the gift becomes adeemed. That is, it effectively becomes void and unavailable to your intended beneficiary. The result could be that they receive nothing if no other provisions are made for them in the Will.
It’s just one of several reasons to be cautious when considering specific gifts in your Will.
Specific gifts can cause additional expense, confusion (and distress) around which beneficiaries pay taxes and other expenses relating to the estate, as well as around who inherits the gift if your beneficiary dies before you do.
So act with caution if you’re considering including a specific gift in your Will.
Make sure you speak with a trusted professional when estate planning to avoid the pitfalls.
For advice, speak with an adviser at Align Financial. To make an appointment call us on (02) 9913 9995.
