What gifts can you leave in a will?

Estimated reading time
 5 min

Learn all about

• What gifts you can leave behind when you pass away
• Different types of gifts, including charity or general gifts
• The projection bias and how it can affect your decisions

Not many people like to think about death. It can be scary, overwhelming, and straight-up anxiety-inducing.

But knowing you can leave behind a gift in your will can help ease the fear you (or those closest to you) might be feeling. Leaving a gift is a great way to support your kin, while also giving them a personal token to remember you by. Plus, you can also make charity gifts (more on that later), so you can help your favourite causes and make a difference.

So, what is a gift in a will?

A gift (also called a ‘bequest’) is something you might leave behind for your beneficiaries – the people you nominate in your will to receive these gifts. The gifts you leave behind will likely come from your estate, the collection of your belongings and assets.

According to the Australian Taxation Office (ATO), a gift should meet the following criteria:

• A transfer of money or property.
• A transfer made voluntarily where nothing is expected in return.
• You won’t benefit from the gift. For example, you don’t gain anything because you gifted money to a loved one or a worthy cause.^disclaimer

What can you gift?

You can gift just about anything that’s in your estate, which might include:

• Property you own and live in.
• Investments, such as shares.
• Personal items like jewellery, artwork, or even household items.
• Family heirlooms.
• Money in your bank account, or physical cash that you have stashed away (or both).

5 types of gifts you can leave in your will

1. Specific gifts

When you choose a beneficiary to receive a specific asset that you own, that is known as a specific gift. When writing your will, you’ll need to be specific about what the asset is and who it goes to. If, for some reason, the gifts you list are no longer owned by you when you die, the intended recipients will miss out.

An example of a specific gift would be leaving a house at a specific address to your oldest son.

2. General gifts

A general gift refers to a sum of money or a category of assets you wish to leave to your nearest and dearest.

An example could be a gift of $10,000, “all my shares”, or “any property owned by me at the time of my death”.

If the assets or funds are not in the estate at the time of your passing, your will’s executor may draw from other assets to satisfy the gift. If there aren’t enough assets or funds, your beneficiaries may receive less or nothing, depending on what’s available.

3. Residuary gifts

A residuary gift refers to the portion of the estate that remains after all debts, taxes, expenses and gifts have been distributed. The residuary gift can go to one beneficiary or be divided among several people.

4. Early inheritance

An early inheritance is when you gift part of your estate while you’re still alive. This might be money, a piece of your property pie, or something sentimental like your crystalware collection. You might choose to do this so you can see your gift being enjoyed while you’re still alive or give someone in your life a helping hand if they are experiencing financial hardship.

For example, your grandmother might gift you money for your wedding, which she then attends to see you walk down the aisle and be part of your special day.

5. Charity gifts

If you’re passionate about a certain cause, like mental health or saving wildlife, then you could consider a charity gift. These gifts allow you to donate funds from your estate to a charity you’ve chosen in your will. It’s a great way to support your favourite charities and help make a difference.

  Brain hack

Projection bias is where we overestimate how much our future self will share the same beliefs, values and behaviours as our current self.

For example, you might include a gift for a certain person in your will feeling confident that your relationship won’t change over time. This is a classic case of projection bias because you’re assuming you’ll feel the same way in the future as you do now.

While we like to believe that our relationships with our inner circle won’t change, the reality is that they might.

To avoid this bias, take a moment to pause and consider whether your decision will reflect what future-you (and your beneficiaries) might want. It’s also a good idea to regularly check your will to make sure your decisions are still aligned with your changing circumstances.