Leaving Gifts in your Will

Making a Will, at its simplest, involves deciding “who gets what”. There are a number of different issues to consider depending on the type of gift, the recipient, and the conditions triggering such a gift:

In your Will, you can gift “chattels” (your personal effects), real property (bricks and mortar) and money. Each type of gift carries with it a number of issues:-

Chattels Gifts

• Keepsake gifts can be extraordinarily emotive and contentious; consider sounding out any particular emotional attachments to specific items amongst your beneficiaries.
• If beneficiaries are going to disagree, try to set ground rules by, for example, giving rights of selection according to an explicit “pecking order”, or by leaving the final say to your trustees.
• Collections or matched sets may be far more valuable if kept together.

Money

• Beware “demonstrative legacies” – leaving a beneficiary the funds you have invested in “Account XYZ” may be an empty gift if those funds have been moved to “Account ABC” by the time of your death.
• Consider index-linking legacies to preserve their value in real terms.

Residue: what is left after debts, tax and other gifts have been paid.

• Ensure that gifts of percentages of your residuary estate add up to 100!
• Ensure that a partial intestacy cannot arise by specifying what happens if your first choice/s of residuary beneficiary fails to survive you.

Digital Assets: personal information that is stored electronically either on a computer or a cloud server account that belongs to an individual.

• Some digital assets have monetary value (cryptocurrencies, online accounts, music downloads), while others have sentimental value (social media accounts, photographs, emails, text or WhatsApp conversations).
• Consider which assets you wish to be preserved, in what capacity, who should be left in charge of them and when they can be destroyed or deleted.

When should beneficiaries receive a gift?

• Minors (children under 18) cannot hold property in their own right, although in some circumstances their parents or guardians can accept gifts on their behalf.
• For significant gifts, it might be advisable to add an “age contingency” meaning that the beneficiary has to attain a certain age before inheriting.
• Avoid trying to attach binding conditions as to the use of gifts. Your wishes could generate unintended disputes and may not be practical when the time comes. If you are concerned as to the misuse of significant sums, a discretionary trust may be the better solution.

First and second death gifts

If you are in a relationship and have created a pair of “mirror Wills” in the same terms, leaving everything to each other and then to children or other beneficiaries, then you can decide whether to leave gifts to others if you are the first, or the second, to die.

• First death gifts will be taxable and will count towards your £325,000 nil rate band, leaving less to carry over to any spouse or civil partner’s estate.
• Making a first death gift ensures that the gift reaches its intended recipient – many Wills leave everything to the surviving spouse, registered civil partner or cohabitee and there is no guarantee that they will then respect your ultimate wishes in their own Will, which can be revoked or amended after your death.
• First death gifts might “double-up” if you and your spouse or partner both make them to the same individual – check this is your intention.
• “Second death gifts” may never come to pass if you fail to survive your partner or spouse.

Good to Know: Related Posts

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Provide guidance to your executors, guardians and trustees, so that they can carry out your wishes.