General Legacies Explained

General Legacies Explained

General Legacies Explained

Demonstrative Legacies

A general legacy is a gift payable out of the general assets of the estate without regard to any particular fund or prop erty. It does not require the delivery of any specific thing and a clause to the effect that "I give and bequeath to my daugh ter, Maria Testator Greene, the sum of $1,000" is a general legacy payable out of the general assets of the estate. A specific legacy is a gift of a specified and designated article or a particular part of an estate, identified or distin guished in the WILL from all others of the same nature. If you want to bequeath some article of personal property, de scribe it in detail; be careful in your description since an inaccurate description may involve your estate in litigation over the identification of a stock certificate or a valuable heirloom. If you have several paintings by the same artist or several similar items of jewelry, it may be well to have photographs taken and to use the photographs, for purposes of identi fication. In this connection, however, be sure that the photo graphs are taken before your WILL is executed.

A demonstrative legacy is similar to a specific legacy in that a particular fund is indicated as the primary source of pay ment. It is similar to a general bequest in that it is chargeable against the estate generally if the primary source fails. The distinction between a demonstrative legacy and a specific legacy is that the demonstrative legacy is not lost or does not lapse if, on your death, the particular fund upon which the gift is charged is not in existence or is insufficient to pay the legacy in full. Legacies which are payable out of the proceeds of specified property are demonstrative as are lega cies which are charged against a trust fund, against the pro ceeds of insurance policies, or against the income of the estate. In making a specific bequest or establishing a specific leg acy, the legatee is entitled to receive the bequest only if the article or property exists and is owned by you at the time of your death. If there is a possibility that you may not be the owner, you should make an appropriate provision such as: "I give and bequeath to my son Frederick Webster 100 shares of the preferred stock of the Everlast Rubber Corporation, pro vided I shall be the owner of such stock at the time of my death." If you want your wife to own your automobile, which you have nursed and polished to perfection, you may add a clause giving her the automobile "free and clear of any encum brances" so she will not be saddled with any payments which may be due for repairs or for a loan you may have made on the vehicle.

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There usually is an inference that the legacy is intended to be a general legacy. Be sure to discuss this with your lawyer because the wrong wording may bring about litigation and expense to your estate. A specific legacy vests immediately upon your death. If you bequeath to your son, Beelzebub, your gold watch, your dia mond-studded cufflinks, your emerald tie clip, Beelzebub becomes the owner as your last breath leaves your body. On the other hand, if you merely leave to Beelzebub "All the rest, residue, and remainder of my estate" and the items of jewelry are a part of the residuary estate, Beelzebub's title will not vest upon your death. It may never vest at all, since the jewelry may be thrown into the residuary estate and distrib uted at different times and under different conditions, and possibly not at all if there are claims which must be satisfied after the payment of specific legacies and debts. Also discuss with your lawyer the tax consequences of the classification of a legacy as general, specific, demonstrative, or residuary. Unless you provide that the legacy is not to be chargeable with a proportionate share of the taxes, the legatee may be called upon to make a contribution toward the taxes and the forced contribution may bar him from receiving or continuing to enjoy the legacy. This is particularly true in the case of jewelry and you should guard against this contingency by conferring with your lawyer and having an appropriate appraisal made, as well as by including the appropriate tax exemption and allocation clauses.

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