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Gifts Under Will

J Fife Aug. 12, 2022

One of the essential objectives in writing a person’s will is to provide for gifts of the person’s assets to his or her beneficiaries.  In a client’s initial meeting with Mr. Fife, the subject of gifts to be made under the will is normally the first topic that is explored.  To accomplish your objectives relating to gifts, it is obvious that your will must identify the individuals who will receive gifts under the will and specify what each individual will receive.  

To accomplish your gift-giving objectives, your will must also specify the manner in which a beneficiary’s gift will be distributed to him or her.  For example, a will may provide for the distribution of a beneficiary’s gift directly to that beneficiary. Alternatively, a will may provide for the distribution of a beneficiary’s gift to another person and direct him or her to manage the gift, as a trustee, for the benefit of that beneficiary.

It is advisable for your will to specify how your assets will be distributed in any of the various sets of circumstances that may exist at the time of your death.  In many cases, your will should also take into account how circumstances may change after your death. Therefore, your will should include alternative provisions for gifts that would take effect in different circumstances.  

Including alternative provisions for gifts in your will is important because you cannot know how circumstances may change during the remainder of your life or after you pass away.  The future circumstances that you foresee may be very different from what actually happens in the future.  

One source of uncertainty is your inability to predict which of your family members will be living when you pass away.  The persons that you select as the primary beneficiaries of your estate may not outlive you. As a result, your will should designate contingent beneficiaries, i.e., the persons who would be the beneficiaries of your estate if the persons selected to be your preferred beneficiaries were to die before you.  If your will does not designate contingent beneficiaries and you were to die before your primary beneficiaries, your will would not include any directions governing how your assets would be distributed. 

In addition to uncertainty about who will survive you, there is also uncertainty as to the circumstances that may be faced by any specific beneficiary whom you have chosen.  Your will might name a minor child as a beneficiary or contingent beneficiary of a gift under your will. Whether it would be more appropriate to make a gift to that beneficiary in his or her own name or to a trust, to be managed for the beneficiary, would depend on the age of that beneficiary on your death.  However, you cannot predict whether that child, at the time of your passing, will have attained the age that you consider sufficient, i.e., an age at which the child would be sufficiently mature to manage the assets. 

Since you cannot know what the beneficiary’s age will be at the time of your passing, your will should provide for an appropriate method of distribution regardless of the beneficiary’s age at that time.  Your will should, therefore, include alternative methods of distribution, with one method applying if the beneficiary has not attained the age that you specify at your death and the other method applying if he or she has attained that age at that time.