Bequest

Definition

A bequest is a gift made by a will, which encompasses the transfer of personal property, money, or real estate from a deceased person (testator) to a designated beneficiary. Bequests can be specific (a particular item or amount of money) or residuary (what remains after all other bequests, debts, and expenses). They are an essential aspect of estate planning, ensuring that the decedent’s wishes are fulfilled and their assets distributed according to their instructions.

Examples

Specific Bequest: John Doe leaves his art collection valued at $50,000 to his daughter, Jane Doe.
General Bequest: Mary Smith bequeaths $10,000 to her nephew, Tom Smith.
Residuary Bequest: After all debts and specific bequests are settled, the remainder of Sarah Johnson’s estate is left to her favorite charity.

Frequently Asked Questions (FAQs)

Q1: What is the difference between a bequest and a devise? A1: Both terms refer to the transfer of property through a will, but a bequest typically refers to personal property, while a devise specifically pertains to real estate.

Q2: Can a bequest be changed or revoked? A2: Yes, a bequest can be updated or revoked at any time by the testator through a new will or a codicil, as long as they are mentally competent when making the change.

Q3: Is a bequest subject to taxes? A3: Yes, bequests can be subject to estate or inheritance taxes depending on the jurisdiction and the value of the estate.

Q4: What happens if a beneficiary predeceases the testator? A4: If a beneficiary predeceases the testator, the bequest typically lapses (fails), unless the will specifies an alternate beneficiary or is structured to include a residuary clause.

Q5: How can a bequest be contested? A5: A bequest can be contested on grounds such as mental incapacity of the testator, undue influence, fraud, or the improper execution of the will.

Will: A legal document by which a person expresses their wishes as to how their property is to be distributed at death, and names one or more persons to manage the estate until its final distribution.
Estate Planning: The process of arranging the management and disposal of a person’s estate during life and after death.
Trust: A fiduciary arrangement allowing a third party, or trustee, to manage assets on behalf of a beneficiary or beneficiaries.
Probate: The judicial process through which a will is validated, and the decedent’s estate is administered.
Inheritance: Assets received from a deceased person’s estate.

Resources and Suggested Books

Online Resources:

Books:

“The Complete Guide to Planning Your Estate in Texas: A Step-by-Step Plan to Protect Your Assets, Limit Your Taxes, and Ensure Your Wishes Are Fulfilled” by Linda C. Ashar.
“Plan Your Estate” by Denis Clifford.
“The Executor’s Guide: Settling a Loved One’s Estate or Trust” by Mary Randolph J.D.
“Estate Planning For Dummies” by N. Brian Caverly and Jordan S. Simon.

Accounting Basics: “Bequest” Fundamentals Quiz

### What is a bequest? - [ ] A legal procedure for buying real estate. - [x] A gift made through a will. - [ ] A trust agreement between two parties. - [ ] A stock market investment. > **Explanation:** A bequest is specifically a gift made by a will, designating how certain assets are to be transferred to beneficiaries upon the testator's death. ### Can a bequest include both money and personal property? - [x] Yes - [ ] No - [ ] Only money - [ ] Only personal property > **Explanation:** A bequest can include both money and personal property such as jewelry, art, or furniture. ### What type of bequest specifies a particular item or amount of money? - [x] Specific Bequest - [ ] General Bequest - [ ] Residual Bequest - [ ] Conditional Bequest > **Explanation:** A specific bequest refers to a defined item or specific sum of money that is allotted to a beneficiary. ### A bequest that is made of what remains after all other bequests and debts are settled is called? - [ ] Specific Bequest - [ ] General Bequest - [x] Residuary Bequest - [ ] Conditional Bequest > **Explanation:** A residuary bequest pertains to what remains of the estate after specific bequests, debts, and expenses have been dealt with. ### Who is the person making the will and deciding on bequests? - [ ] Administrator - [x] Testator - [ ] Executor - [ ] Beneficiary > **Explanation:** The testator is the person who makes the will and specifies the bequests and how their estate should be managed after their death. ### What can happen to a bequest if the intended beneficiary predeceases the testator? - [x] The bequest can lapse. - [ ] The bequest is automatically transferred to the state. - [ ] The will is invalidated. - [ ] The executor can decide on the new beneficiary. > **Explanation:** If a beneficiary predeceases the testator and no alternate is specified, the bequest typically lapses or becomes void. ### What legal process validates a will and administers the estate? - [ ] Trust Administration - [ ] Inheritance Filing - [x] Probate - [ ] Estate Closure > **Explanation:** Probate is the legal process through which a will is validated and the estate is distributed according to the will's directives. ### Can a bequest be contested? - [x] Yes, under certain conditions - [ ] No, it's always enforceable - [ ] Only if the executor agrees - [ ] Only if it's worth over a certain amount > **Explanation:** A bequest can be contested on grounds such as undue influence, mental incompetence, or improper execution of the will. ### What is a common method to update or revoke a bequest? - [ ] Writing a new bequest clause. - [x] Creating a codicil or a new will. - [ ] Requesting through a court order. - [ ] Announcing in a living will. > **Explanation:** A codicil or a new will are common legal instruments used to update or revoke bequests. ### How are bequests related to estate planning? - [ ] They are unrelated concepts. - [ ] Bequests help manage retirement funds. - [x] Bequests are a key component of estate planning. - [ ] They ensure businesses leave assets. > **Explanation:** Bequests are a key component of estate planning, which involves arranging the disposal of a person's estate during life and after death.

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