It is common for a person to wish to leave a specific item to a specific person when they pass away. For example, they may wish to leave someone they care about; their motor vehicle, jewellery or even their home. The difficulty with a specific gift, however, is ensuring it remains a valid gift at the time a person passes away.
When gifting a specific item, the biggest risk is the sale, gifting, or loss of that item before the person making the will passes away. If this occurs, the gift fails, and it can result in claims against their estate.
It is easy for good intentions to go wrong. For example, the testator may give their Woolworths shares to their nephew in their Will, but then later sell the same shares and use the proceeds to purchase a caravan. Upon that person’s death, the gift to the nephew fails because there are no Woolworths shares.
With the assistance of a solicitor experienced in succession law, some of the difficulties associated with specific gifts can be anticipated and overcome. It is therefore important to seek legal advice should you wish to include a specific gift in your Will.
A second difficulty with specific gifts is often the unknown consequence of gifting an item which is subject to a debt or encumbrance. For example, a person might specifically gift their home to one of their children. At the date of death, the property is subject to a mortgage. Unless the Will expressly states otherwise, the beneficiary not only inherits the property, but they also inherit the mortgage debt as well.
Beneficiaries of specific gifts also become responsible for any expenses associated with that gift (unless the Will states otherwise). For example, postage of the gift to the beneficiary or storage of the gift until it can be collected.
At DSL Law, we have the experience necessary to provide skilled advice in relation to the drafting of a specific gift. We can also provide advice concerning the potential validity or failure of a gift and what options, if any, may be available to an executor or disappointed beneficiary. If you are concerned to make sure your gifts will work, please contact us.