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What are Demonstrative Bequests and How do They Relate to Estate Planning?

Leaving a demonstrative bequest in your Will might be the greatest give you can give to a charity you care about. Learn more here.

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Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

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As you think of your last wishes and move to create an Estate Plan that documents them, you may be wondering how those you love the most will get along without you. Will your children have everything they need? Will your grandchildren's education be provided for? Will an extended family member experience a financial setback and need help at a time when you may not be there to help?

When you create a Will online with Trust & Will, you can plan for the future—now. In this guide, we'll cover everything you should know about Demonstrative Bequests and how to name the Beneficiaries of these particular Bequests in your Will.

  1. What is a Demonstrative Bequest?

  2. What to Know About Demonstrative Bequests

  3. Avoiding a Long Probate

  4. Avoiding Ademption

  5. Naming Demonstrative Beneficiaries

What is a Demonstrative Bequest?

A Demonstrative Bequest is a gift, usually monetary, left in your Will to be paid from a specific source or account. This could be from a bank account, retirement fund, or stock portfolio. For example, if you wanted to leave $5,000 to your sister in your Will and you wanted that sum paid from your personal savings account, you would state that in a Demonstrative Bequest in your Will.

Bank accounts aren't the only financial sources you can use to make Demonstrative Bequests.

If you have invested in stocks through a mutual fund, casual dabbling, or day trading on your own, you can leave your investment portfolio to one or more Beneficiaries. If you made some money in the stock market, you might have influenced or helped get family members or close friends into it, too. In the event of your death, you could leave your stake to a fellow trader with a Demonstrative Bequest. For example, you could state that you wish to gift all of your stocks, bonds, and investments to your son. If you want to split up your stock portfolio, giving your son all of your shares of Amazon and Apple stocks, but also leaving 100 shares of Netflix stock to your nephew, you can do that, too.

If you went to a college or university, you are familiar with the annual envelopes asking for your generous donation. In addition to your yearly contribution, you may wish to leave them a monetary gift in your Will. If you want that sum paid from your retirement fund, then you would make a Demonstrative Bequest to your institution of higher learning for the exact amount you would like to contribute.

What to Know About Demonstrative Bequests

Demonstrative Bequests are particular and have precise instructions. They can also work a little differently than other types of Bequests. Here's what you should know about Demonstrative Bequests and naming your Beneficiaries.

Avoiding a Long Probate

Probate Court is the process of settling a deceased person's Estate. A Probate Court judge ensures payment of a Decedent's debts and that assets, possessions, and monetary gifts get to their intended Beneficiaries.

All Wills must go through Probate Court. What doesn't need to go through Probate Court are Revocable Living Trusts, which allow assets to pass seamlessly from the Testator, the person who wrote the Will, to their Heirs. But just because all Wills go through Probate doesn't mean that you can't take steps to keep it from taking longer, costing your loved ones precious time, money, and resources.

Demonstrative Bequests clearly state who will receive what and from where. Because they come with these specific instructions, Demonstrative Bequests don't hold up the Probate process. A Probate Judge can easily see what you intended to leave to whom and from where. Even if a particularly bitter family member wanted to contest your Will, saying that a great-niece shouldn't receive a $2,000 inheritance you left, Demonstrative Bequests aren't typically up for interpretation. Clearly stating to whom your financial assets should go to will save your loved ones the time and expense of having to navigate the  Probate process.

Avoiding Ademption

Ademption is what happens when identified property, assets, or funds are no longer part of someone's Estate at the time of their death. For example, if you left your practical, dependable car to your nephew in your Will, but the car is already dead and sitting in a junkyard when it comes time for him to inherit it, the gift becomes irrelevant. It's as if you had never left that car to your nephew in the first place. After all, you can't give someone something that no longer exists.

Stocks, too, can become obsolete over time. Did you invest in GameStop stocks and plan to hold onto them simply for the sake of popular culture? You can list them in your Will and pass them down to a Beneficiary who will appreciate them, but ask yourself, "will GameStop stock still be around if I die ten years from now? Twenty?" When naming stocks and other investments in your Will, you will want to be at least moderately sure that the IPOs you've invested in will stick around for the long haul.

But Ademption does not apply to Demonstrative Bequests. Let's say that you still wanted to leave $5,000 to your sister in your Will. You would make a Demonstrative Bequest that $5,000 be paid to your sister from your Bank of America savings account. But what if you closed your BofA account and moved to a Credit Union before you died? Good news: Your sister would still inherit $5,000 from your Estate. Your Demonstrative Bequest would have the status of a General Bequest instead, as though the source of the money—your Bank of America savings account—was simply not specified.

Naming Demonstrative Beneficiaries

To make a Demonstrative Bequest to a family member, longtime friend, or your favorite charitable organization, name your Demonstrative Beneficiary (or Beneficiaries) in your Will, how much you wish to leave to them, and the account from which to pay it. Your Demonstrative Beneficiaries will inherit monetary gifts from your Estate paid out from specific funds. With Trust & Will, the leading online Estate Planning website, you can easily make a Will online with expert help every step of the way.

Demonstrative Bequests can leave you feeling secure, knowing that your loved ones will still be cared for, even if you can't be there.

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