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Thursday, August 26, 2010

Who pays for a gift to be shipped to a beneficiary?


One of the main responsibilities of an executor is to distribute gifts to the beneficiaries as set out in the Will. If all of the beneficiaries live nearby, or if all of the gifts are in cash, this is an easier job logistically. But what happens when the executor has to send Grandma's silver collection to a beneficiary on the other side of the country, or has to get Dad's re-built Mustang to someone three provinces over? The items have to be stored, insured, packed, and shipped to the beneficiary. Who pays these costs? Is it the beneficiary? Is it the estate?


There are some general guidelines for the executor to follow in these cases. First of all, check what the Will says about this. Most won't mention it, unfortunatey, but occasionally a Will states the testator's wishes. If the Will leaves some instructions about who pays, then the executor should follow them.


Assuming that the Will has not given any instructions, the executor should then follow a rule about specific gifts vs. general gifts. The cost of getting a specific gift to a beneficiary is paid for by that beneficiary. The cost of getting a general gift to a beneficiary is paid for by the estate.


What's a specific gift? It's any item that is described in a way that allows you to identify it in particular. For example, Grandma's silver described earlier in this post would be a specific gift. Any gift that starts with the word "my" is probably specific, such as "my wedding ring", "my book collection", or "my re-built '67 Mustang". This means that all items on a Memorandum of Personal Effects (or hand-made list), left by a testator in addition to a Will, or in the Will, should be specific gifts. The beneficiary pays the costs of getting a gift like this to them.


What's a general gift? Any share of the residue is a general gift. Also, a gift with a description such as "a house" or "a truck" (as opposed to "my house" or "my truck") is a general gift. It doesn't specifically describe any particular house or car, even if the testator only had one. The estate pays the cost of getting a general gift to the beneficiary.


3 comments:

  1. Do you have any sources for these notions?

    ReplyDelete
    Replies
    1. Yes, of course I do. If you would like to refute any point I make on this blog, feel free to do so, citing your sources, of course.

      Lynne

      Delete
  2. I think, like me, he's not looking to refute, but looking for case law to help support

    ReplyDelete

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