The main purpose of a Will is to ensure that your estate goes to those whom you wish to receive it. This is achieved by making legacies and gifts in your Will.
It is important that you give careful thought as to who is going to benefit from your estate when you die since the instructions you leave in your Will are going to be binding upon your executors. Unless your beneficiaries agree amongst themselves to vary the terms after your death, then what you put in your Will now may have a profound effect.
Under the law of England and Wales there are essentially three types of gifts which you can make under your Will:
A specific legacy or gift is a gift of an item of your property as opposed to money. For example you may wish to leave your stamp collection to a nephew or your gold wristwatch to your god-daughter.
If you make a gift to someone of a specific item which you own at the date of the Will and you subsequently dispose of it before your death then the gift will fail and the beneficiary will receive nothing. Even if the money from the sale of the item is still identifiable – for example because it has been paid into a particular bank account on the date of the sale and then not touched subsequently – the beneficiary will not be entitled to that money.
However, if you make a gift of a specific item that you do not own at the date of the Will and you do not subsequently acquire it prior to your death then there is a duty upon the executors to acquire the item, wherever possible, and to pay for it from the estate of the deceased. A specific gift of this nature will only fail if it is not possible to acquire the item. Thus, if the Will states that a beneficiary is to receive shares in a particular public company then those shares would need to be purchased. However, if the company had ceased to exist then there would be no duty upon the executors of the Will to acquire them.
The gift of a specific item can also fail if it is not possible to identify the item in question or the recipient of the item. Thus, if the Will states that the testator leaves their sapphire broach to their god-daughter, but does not specify which of the 10 sapphire broaches owned at the date of death, or does not specify which of the testators 7 god-daughters is to receive it, then the gift will fail and all of the broaches will simply form part of the residuary estate.
A specific gift can also fail if the beneficiary fails to meet a condition imposed upon the gift. Thus if a Will leaves a particular item on the condition that the recipient reaches the age of 18 and the recipient dies before that age, even though the testator has died before them, then their estate will not receive the gift. Note, however, the limitations on making gifts subject to conditions (see below).
A specific gift will also fail if the beneficiary has predeceased the testator or if the beneficiary has survived the testator but failed to survive for long enough afterwards to satisfy a condition in the Will.
A pecuniary legacy is simply a gift of money and will be paid by the executors from the estate – either using existing cash or bank accounts or from the proceeds of sale of assets if this is necessary to realise the sum in question.
As with a specific legacy, there are a number of circumstances in which a pecuniary legacy will fail. These include:
If a testator wants to take steps to prevent a gift from failing then one of the steps they can take is to include what is known as a substitutional gift – that is to say a gift that will come into effect only if the primary gift fails.
An example of a substitutional gift would be where a sum of money to a particular beneficiary but the gift included a provision that in the event that the first beneficiary should die before the testator, but leaving children alive at the date of the testator’s death, then those children would take the gift their parent would have received.
If a testator leaves a gift to a spouse or civil partner and they divorce or the civil partnership is dissolved prior to the death of the testator, then the gift to the spouse or civil partner will fail unless the Will specifically states that this is not to happen.
A residuary estate is that which is left after all of the debts and expenses of the estate have been paid and all of the specific and pecuniary gifts have been made.
It can be made up of a house (or the proceeds of sale of a house), money at the bank, money received from life policies, personal belongings, stocks and shares – in fact any item that has not been left to a specific beneficiary and any money that has not been left to pecuniary beneficiaries.
It is essential that your Will disposes adequately of all your assets and a residue clause will normally achieve this since, anything not paid out by way of expenses, debts and legacies will fall into the residue and pass to whoever is entitled to that residue.
However, it is still possible for the Will to fail if it is not clear to whom the residue should be left or the person to whom it should be left has predeceased the testator or failed to satisfy a condition in the Will. It is essential, therefore, that suitable substitution clauses are included – for example by leaving the residue to a spouse or civil partner, and if he/she fails to survive you to your children in equal shares and to their children (your grandchildren).
You are entitled, if you wish, to impose conditions on the gifts which you make in your Will.
Normally the conditions imposed will be fine and will simply provide, for example, that a person must reach the age of 18 before they can receive a gift or must outlive the testator by 28 days.
However, some conditions are not regarded as being acceptable and if you attempt to impose them on beneficiaries they will either be regarded as being void or will simply not take effect.
Some conditions are regarded by law as being against public policy whilst others are deemed simply to be undesirable.
What would amount to an unacceptable condition would depend upon the circumstances and the Will itself. However, in the past, the courts have held that the following constitute conditions that would not be upheld:
Click on any of the links below to go to a Factsheet dealing with that particular topic.
Please note that a pdf version of each of these Factsheets can be downloaded from our main Factsheets page.