Updated: Feb 25, 2020
There are almost infinitely many things that people can give or bequest to others in their wills. But all those possible things that people can leave to others in their wills typically fall within a handful of general categories:
- the entirety of the estate
- shares or percentages of the estate
- testamentary trusts
- specific gifts, and
- the residue of the estate.
Leaving the entirety of your estate to someone
It’s very common for a testator (someone doing a will) to opt to leave everything to a single person, typically a spouse or common-law partner. Sometimes this also happens if a testator is widowed or divorced and has only one child. When one person is listed as the sole beneficiary, it’s usually stated that if that person dies before the testator, then certain other people will then inherit the estate. These alternate beneficiaries are often referred to as contingent beneficiaries.
Shares or percentages of the estate
Let’s say a person is widowed or divorced and has three adult children. A common thing to do would be to leave everything in equal shares to the three children. When drafting a will, this could be expressed as each child getting a one-third share of the estate. Percentages probably wouldn’t be used in this type of case, because the percentage number is kind of awkward to write; 33.33333333 percent doesn’t have a great ring to it. However, if there are two children or four children, rather than three children, expressing the portion each receives as a percentage is fine. Another option is simply to state that certain people will all get equal shares of the estate, and then you don’t even have to do any math.
It’s not uncommon to leave trusts to beneficiaries in a will. Simply put, a trust is a type of property ownership in which someone, the trustee (or trustees as the case may be), administers the property for the benefit of one or more people, the beneficiaries. A testamentary trust is simply a trust created in a will.
Testamentary trusts are commonly used for minor children and for disabled adult children. In the case of minor children, they will, in all likelihood, eventually get to the stage where they can handle the property themselves, so those trusts tend to stipulate that what remains in the trust will be divided equally when the youngest child reaches a certain age. In the case of a testamentary trust for a disabled adult child, the trust may be ongoing throughout the life of the child.
Specific gifts are gifts in a will of particular items of property. A specific gift may be large and expensive, like a house, or small and of little monetary value, like an item of furniture. Specific gifts can also be specified amounts of money, for example, a gift of $10,000. An advantage of making use of specific gifts in a will is that it allows for precision: a testator can give a specific person a specific thing. A disadvantage of using specific gifts is that the will may become too granular and may require frequent revisions if the items of property owned by the testator change over time.
The term residue doesn’t sound very nice. It kind of evokes the image of a crime show, in which the forensic investigators find some type of residue on something or someone. In this case, residue just refers to what is left over in the estate after all the specific gifts have been given out. For example, if an estate has $113,000 in value and there is one specific gift of $10,000, then the residue is $103,000. As with the estate itself, you can leave the entire residue to someone or you can leave shares or percentages of the residue to several people.
Putting it all together
Many wills use a combination of the gift categories listed above. For example, a person might leave everything to their spouse, but if their spouse dies before them, then everything will go to a trust for the minor children.
In any will, the goal is to be comprehensive and unambiguous. You want all the property in your estate to be covered and you want it to be clear who gets what. That being said, you also want your will to be relatively concise, and you want it to remain relevant as the property you own changes over time. Making proper use of the gift categories mentioned above can enable you to achieve these goals in the drafting of your will.