Gifts in a decedent’s will or trust fall into any of three categories: General, specific and residuary. A will or trust may involve some or all of these categories. Let us discuss each category.

A general gift is a gift of a sum of money to an individual or a charity. For example, “I leave $5,000 to my nephew Sam Smith, if he survives me”. Typically, but not always, exact monetary gifts are the smaller gifts, such as those made to grandchildren, nieces/nephews, friends, and charities.

General gifts can also supplement other specific and residuary gifts, for various reasons such as to equalize out inheritances. For example, “I leave $15,000 to my daughter Alice Applegate and I leave my 150 shares of IBM stock to my son Anthony Applegate.” Perhaps the $15,000 that Alice gets more or less equalizes the two beneficiaries’ separate inheritances.

Another purpose for General gifts is to leave an heir some money so that the heir is not disinherited and so does not contest the will or trust. For example, “I leave $25,000 to my daughter Alice Applegate, but if she contests my will then she shall forfeit this gift and shall receive nothing.” This is a “stick and carrot approach” to encourage Alice’s cooperation.

Specific Gifts are gifts of certain or specific assets as opposed to money or portions of an estate as a whole. Specific gifts usually involve real property or tangible personal property, but could also involve a specific gift of a bank account.

Specific gifts of tangible personal property can be worded very exactly, such as, “my 2010 Buick Le Sabre goes to Alice Applegate” or can be worded very generally, such as, “my household possessions, my household appliances and my vehicles all go to Alice Applegate.” Oftentimes, people will sign and date an itemized schedule of specific gifts, including heirlooms and valuables. The schedule is then incorporated by reference inside the will or trust, as relevant, and may later be replaced by the person signing and dating a revised schedule, if allowed in the will or trust.

Residuary gifts oftentimes is the largest, and sometimes exclusive, type of gift. A residuary gift is a gift made of what remains in the estate after all expenses of administration, taxes, just debts of decedent, and other types of gifts (i.e., general and specific) are made. Residuary gifts are expressed either as a percentage or as a fraction of the remaining (residuary) estate. For example, “I leave the balance of what remains in my trust estate equally between my two children.” Thus, each child gets one-half or 50% of the balance of the estate.

Unlike other gifts, therefore, residuary gifts come last after all other gifts, expenses, taxes, and debts are paid. Thus, it is possible for the residuary gifts to be partially or even completely eliminated and for a primary beneficiary to come out short. That is, when the person signed their estate planning the combination of general, specific and residuary gifts to make sense and give effect to the testator’s intentions. Over time, the person’s net worth may decline and what remains after satisfying the specific and general gifts may be inadequate to the decedent’s intentions.

Residuary gifts can be satisfied in a variety (or combination) of ways, such as, selling the residuary assets and distributing the net sale proceeds, distributing title to assets to beneficiaries as undivided fractional co-owners, and/or valuing and allocating assets on a so-called, “non pro rata” basis so that that total value of those assets each beneficiary receives as a percentage (or fraction) of the total value of the entire residuary estate (all assets) equals the intended proportion.

The foregoing discussion is not legal advice. Consult a qualified attorney for guidance. Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at and 707-263-3235.

“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”