4 minute read

Bequest: To Give or Leave a Gift

Curious about bequests and how they relate to estate planning? We’ve got you covered in this short guide.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

When you first dip your toe into the world of estate planning, you’ll begin to hear a lot of fancy legal-speak. They may sort of start making sense contextually, but nevertheless it’s a good idea to know exactly what they mean. This is especially true because terms are often used interchangeably when they are in fact not the same. One such word is “bequest.” It’s a gift that you leave through your Will or Trust. To bequest or not to bequest, that is the question.

What is a Bequest? 

A bequest is property given to a beneficiary through a will. More specifically, it describes the process of transferring personal property, such as money and personal belongings. Bequests are often used to refer to real estate, for which the proper term is actually “devise.” To clarify, bequests refer to any personal property that isn’t permanently fixed to a piece of land. Anything from jewelry, clothes, and cars are included.

You can make a bequest to an individual or an organization such as your favorite charity. To make a bequest, you can state something as simple as “I give $5,000 to my church” in your Will.

How Does a Bequest Work

Bequests are made via instructions left in a Will. They can also be included in other types of estate planning documents, such as a Trust or beneficiary designation. These are all estate planning tools that designate how your estate should be managed and distributed after your passing. An individual typically details their bequests when they create their Will, and then updates it regularly, especially when their family grows and needs evolve.

Before bequests can be made, your estate will typically go through the probate process. This means that your Will and other estate planning documents go through probate court for legal validation before property can be distributed. If you do not leave a Will, then your assets are distributed to direct family members in accordance with state law. 

Bequest & Estate Planning 

Now, you may be wondering how a bequest fits into estate planning. Estate planning is the process through which you make arrangements for the distribution of your property after your passing. Your estate plan includes important documents such as your Will or Trust, through which you can make bequests. Proper estate planning is powerful because it can help grow and preserve your assets for you and your family. Be sure to check out our Estate Planning 101 guide, as it covers everything you need to know to get started.

Before you can start making bequests, you must first set up an estate plan. To do so, follow these simple steps:

  1. Create an inventory of everything you own, including financial assets.

  2. Set up life insurance and other policies that will set your family up for success.

  3. Decide who you want to take care of you, your children, and your pets in the case you become incapacitated or upon your passing.

  4. Name your beneficiaries, who are those who will be on the receiving end of your bequests.

  5. Select and notify your executor, who will be responsible for making sure that your wishes are carried out. 

  6. Work with an estate planning service such as Trust & Will to set up a Will, as well as a Trust if you choose to do so.

  7. Schedule calendar reminders to review and update your estate plan on a regular basis, such as the recommended 3 to 5 years.

Bequest vs Inheritance vs Gift: What's the difference?

So, what is the difference between a bequest, an inheritance, and a gift? Let’s first take a look at bequest vs. inheritance. These two terms are often used interchangeably, and really, they’re two sides to the same coin.

A bequest is the act of leaving property to a loved one through your Will. An inheritance describes the property itself, as well as the rights an individual has to property after your passing. In other words, a bequest is more about you, and the inheritance is more about your beneficiary on the receiving end.

We find ourselves in a similar situation when defining the difference between bequest vs gift. A bequest is a gift, but specific to those that are made as a part of a Will or a Trust. However, a gift is not necessarily a bequest. A gift describes the act of giving something to another voluntarily, and without expecting to receive anything in return. Gifts can be part of the estate planning process, but can also be completely unrelated.

Frequently Asked Questions

In 240 words or less answer the following questions. Feel free to add on as it pertains to the topic.

What is the difference between gift and bequest?

A bequest is a gift, but a gift is not necessarily a bequest. A bequest describes the act of leaving a gift to a loved one through a Will. For example, you could simply state something like “I bequest my red Corvette to my son” in a Will. On the other hand, a gift can be made outside of a Will. For example, you can make a charitable donation of $1,000 to the local children’s hospital today. This act can be completely unrelated to the event of your death and your estate plan.

Do I have to worry about paying tax on bequest?

You will not owe any taxes when making a bequest. However, this should not be confused with taxes that could be assessed upon your death. For example, some states levy an estate tax or an inheritance tax. Your beneficiary might also face capital gains tax if they choose to sell any part of their inheritance for a profit. Read up on the types of taxes that can affect your inheritance that you leave to your beneficiaries. 

Can I refuse a bequest in a will?

Yes, you can reuse a bequest that was made to you in a will. The process of refusing a bequest is called a “disclaimer.” In order to do so, you must provide a disclaimer in writing, stating that you refuse to accept the asset or assets. You must do so within nine months of the grantor’s passing. You cannot change your mind, and you cannot benefit from the asset in any way, such as in the form of proceeds or residual income.

Should I talk to an attorney for help with bequests?

It’s always a great idea to consult a professional for help with any aspect of estate planning. For example, they can help you make sure that you use correct and specific wording that prevents any future confusion or legal contestation. 

Set up a Bequest Through Trust & Will

In summary, setting up a bequest describes the act of bestowing a gift on a loved one through your Will. Upon your eventual passing, the person named in the bequest will receive the property you described. In this sense, setting up bequests for those you love will be an amazing way for them to remember you and honor your life. 

If you’re interested in setting up bequests, the first step is to establish your Will! At Trust & Will, we make it easy and affordable for you to set up an estate plan, including a Will. You can also set up a Trust if you choose to do so. If you feel like you don’t know where to begin, don’t worry! Our support specialists can guide you through the process. We’ve made sure to make estate planning something that is accessible for everyone.

Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!