A specific gift can be a particular item or sum of money you wish to give to someone in your Will. You must describe the item precisely, so that the executors of your Will can understand exactly what item you intended to be gifted.
A non-specific gift is a general gift that doesn’t refer to any particular item you possess. So, instead you might wish to gift ‘all of your possessions’.
Residuary gifts are commonly used to gift all your remaining property to your chosen beneficiaries, instead of it falling under the intestacy rules. You can gift the ‘residue’ of your estate. This is everything left in your estate after all debts, bills and taxes have been paid, and all specific and non-specific gifts have been distributed out.
Gifts to children under the age of 18 will usually be held by executors for safekeeping. Gifts will be held until the child reaches 18, unless you state that the child’s parent or guardian can take receipt of the gift on the child’s behalf.
It is common to set up a trust to pass gifts to children.
If you decide to leave a gift to charity, it will be free from inheritance tax. You will be able to decide what kind of gift to leave, such as a specific amount of money, or a valuable item, such as a piece of jewellery.
You may decide to gift a charitable donation to reduce the value of your estate, whilst supporting a good cause. This is quite common. By gifting to a charity, you can help lower the value of your estate so that it falls below the nil-rate band, so that no inheritance tax is payable on your assets.
If you decide to gift to a charity, it is important you state the full name of the charity, the registered charity number, and the sum of money or the valuable item (described precisely) you wish to donate.
If instructions regarding gifts in your Will are not specific enough, then a gift failure can occur. This is why it is extremely important that you are very clear when describing what is being given, and who it is being given to.
The gift goes back to the estate and is either distributed accordingly or according to the rules of intestacy.