How Do I Give My Property Away In My Will?

In a Will, property is gifted in four ways.

First, one may give tangible personal property to specific beneficiaries by tangible personal property gift list.  RCW 11.12.255.  Tangible personal property is your “stuff,” that is, your personal possessions.  Tangible personal property includes personal and household items, furniture, automobiles, boats, airplanes, jewelry, precious metal bullion, and furnishings. Tangible personal property does not include property used for trade or business, real estate, mobile homes, or intangible property such as money, bank accounts, promissory notes, certificates of deposit, securities, copyrights, or patents. RCW 11.12.260.  The gift list is extremely flexible, and may be revised by the testator as often as she may wish, without any formalities other than signing and dating the new gift list.

Second, one may give away specific property to a legatee (receiver of a gift in a Will) as “specific bequests.”  Property of any sort, including intellectual property, real property, and money, may be given by specific bequest.  Sometimes, a testator wishes to make a specific bequest of a certain sum of money.  This I generally discourage.  At the time of making one’s Will, the testator does not know what portion of her estate is represented by any specific dollar sum.  Inflation may make that dollar sum meaningless by the date of death.  Or long disability may deplete the testator’s estate.  The abatement rules reserve specific bequests in preference to all other gifts.  Most frequently, testators make their primary gifts to beneficiaries from the residue of their estate (what remains after all bills and obligations of probate have been paid).  If the testator’s estate is depleted, the only persons who receive anything might be the legatees of specific bequests.  That is often an outcome opposite to the testator’s intention.  Specific bequests work well where one has property one knows must be delivered to a particular person, say a great grandmother’s engagement ring which passes in the family from eldest daughter to eldest daughter, or a vacation property to be held by all the children of a couple.

Third, residuary bequests give beneficiaries a portion of what remains after all the obligations of the estate have been paid and the specific bequests and tangible personal property gift list items have been distributed.  Residuary beneficiaries may take outright or through a testamentary trust.  Gifts taken outright are distributed to the legatee directly and become their property to do with as they please.

Fourth, residuary gifts to a testamentary trust deliver funds to a trustee, who is bound to benefit the trust’s beneficiaries in some specific ways, and thereafter to distribute all the trust principal as the trust specifies.  Testamentary trust gifts should be utilized where there exist specific concerns about the effect having control of substantial sums of cash might have on a beneficiary, for example, minors or persons of diminished mental capability.  One can even donate funds in trust for the benefit of animals.  RCW 11.118.  Trusts are extremely flexible instruments, and a trustor (person creating the trust) may release her trustee from many statutory duties (other than the duty of acting in good faith with honest judgment, or she may add duties not contained in the statutory scheme.  RCW 11.97.010.  A trustee has substantial powers over the assets of a trust, enumerated in the statute.  RCW 11.98.070.  No trust provision that extends control over the trust funds longer than 150 years is valid (Rule Against Perpetuities).  RCW 11.98.130, 11.98.140, 11.98.150.  The trust statute specifies investment rules for trustees.  RCW 11.100.  For example, trustees must invest solely for the benefit of trust beneficiaries, and impartially as between them.  RCW 11.100.045.  A trustee shall diversify her investments.  RCW 11.100.047.  Specific statutory rules govern the allocation of receipts and disbursements as between principal and interest with respect to trust funds.  RCW 11.104A.010 et seq.  Trustees have a duty to account to the court and beneficiaries, unless relieved of that obligation by express terms of the trust.  RCW 11.106.  Gift distribution rules lie at RCW 11.108.  Rules governing charitable trusts are contained at RCW 11.110.  Rules governing gifts to minors are contained at RCW 11.114.