Learning Outcomes
After reading this article, you will be able to classify the main types of testamentary gifts—specific, general, demonstrative, pecuniary, and residuary—and explain their legal effects. You will understand how to interpret will clauses, identify the consequences of different gift types, and apply the rules governing the failure of gifts, including ademption and lapse, in SQE1-style scenarios.
SQE1 Syllabus
For SQE1, you are required to understand the classification and interpretation of testamentary gifts, and the legal consequences when gifts fail. In your revision, focus on:
- the different types of gifts in wills: specific, general, demonstrative, pecuniary, and residuary
- how to distinguish between these gift types in practice
- the legal principles governing the interpretation of will clauses
- the main reasons why gifts may fail, including ademption and lapse
- the consequences of failed gifts for estate distribution
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What is the difference between a specific gift and a general gift in a will?
- What happens if a specific gift is no longer in the testator’s estate at death?
- How is a demonstrative gift treated if the specified fund is insufficient?
- What is the effect of a beneficiary predeceasing the testator on a pecuniary legacy?
Introduction
When interpreting a will, you must identify the type of gift being made, as this determines how the gift is fulfilled and what happens if it fails. The classification of gifts—specific, general, demonstrative, pecuniary, and residuary—affects the rights of beneficiaries and the duties of personal representatives. Understanding these distinctions is essential for SQE1 and for advising clients on estate administration.
Types of Gifts in Wills
Specific Gifts
A specific gift is a testamentary gift of a particular, identifiable asset, distinguished from all other property in the estate.
Key Term: specific gift A gift of a particular, identified item or asset owned by the testator at death, such as “my diamond ring” or “my car”.
If the asset is not in the estate at death, the gift fails (is “adeemed”).
General Gifts
A general gift is a gift of property described by type or amount, not referring to any particular asset.
Key Term: general gift A gift that can be satisfied from any suitable property in the estate, such as “£5,000 to my niece” or “a car to my brother”.
General gifts are not tied to a specific asset and are fulfilled from the estate’s general assets.
Demonstrative Gifts
A demonstrative gift is a hybrid: a gift of a sum of money or property, directed to be paid primarily from a specified source, but not limited to that source.
Key Term: demonstrative gift A gift of a stated amount or property, to be paid from a particular fund or account, but payable from general assets if the fund is insufficient. If the specified fund is insufficient, the balance is paid from the general estate.
Key Term: pecuniary gift A gift of a fixed sum of money, usually payable from the general estate, such as “£10,000 to my friend”.
Key Term: residuary gift A gift of all property remaining in the estate after payment of debts, expenses, and other gifts.
Pecuniary Gifts
A pecuniary gift is a gift of a fixed sum of money.
Residuary Gifts
A residuary gift is a gift of the remainder of the estate after all debts, expenses, and other gifts have been paid.
Legal Effects and Consequences of Gift Types
The classification of a gift determines:
- How the gift is fulfilled (from which assets)
- The order in which gifts are satisfied if the estate is insufficient
- What happens if the gift fails (e.g., ademption, lapse, abatement)
Worked Example 1.1
A will states: “I give my Rolex watch to my nephew, £5,000 from my Barclays account to my niece, and £10,000 to my cousin.”
Question: How should these gifts be classified?
Answer: The Rolex watch is a specific gift. The £5,000 from the Barclays account is a demonstrative gift. The £10,000 to the cousin is a general pecuniary gift.
Failure of Gifts
Gifts in wills may fail for several reasons. The main types of failure are ademption and lapse.
Ademption
Ademption occurs when a specific gift is no longer in the estate at death. The gift is “adeemed” and the beneficiary receives nothing.
Key Term: ademption The failure of a specific gift because the item is not owned by the testator at death.
Lapse
Lapse occurs when a beneficiary predeceases the testator. Unless the will provides otherwise, the gift fails and falls into residue or, if the gift is of residue, into intestacy.
Key Term: lapse The failure of a gift because the beneficiary dies before the testator, unless saved by statute or substitution.
Worked Example 1.2
A testator leaves “my painting by Turner to my daughter.” Before death, the painting is sold and not replaced.
Question: What is the effect on the gift?
Answer: The gift is adeemed. The daughter receives nothing, as the painting is no longer in the estate.
Worked Example 1.3
A will leaves “£2,000 to my friend Sam.” Sam dies before the testator. The will does not provide for substitution.
Question: What happens to the gift?
Answer: The gift lapses. The £2,000 falls into residue.
Demonstrative Gifts and Insufficient Funds
If a demonstrative gift cannot be fully satisfied from the specified fund, the shortfall is paid from general assets. If the fund does not exist at all, the gift is treated as a general pecuniary gift.
Revision Tip
For SQE1, be careful to distinguish between specific and general gifts. Only specific gifts are subject to ademption. Demonstrative gifts are not adeemed if the fund is missing—they become general gifts.
Summary Table: Types of Gifts
| Type | Example | Main Features | Failure (if any) |
|---|---|---|---|
| Specific | “my gold ring to X” | Identified asset; only that item | Adeemed if not in estate |
| General | “£1,000 to Y” | Not tied to any asset; paid from general assets | Not adeemed |
| Demonstrative | “£2,000 from my HSBC account to Z” | Paid from fund, then general assets if needed | Not adeemed; shortfall paid |
| Pecuniary | “£5,000 to A” | Fixed sum of money | Not adeemed |
| Residuary | “rest of my estate to B” | All remaining assets after other gifts | Fails if no beneficiary |
Key Point Checklist
This article has covered the following key knowledge points:
- The main types of testamentary gifts are specific, general, demonstrative, pecuniary, and residuary.
- Specific gifts are of identified assets and are subject to ademption if the asset is not in the estate at death.
- General gifts are satisfied from any suitable property and are not adeemed.
- Demonstrative gifts are paid from a specified fund, but if the fund is insufficient, the balance is paid from general assets.
- Pecuniary gifts are fixed sums of money, usually paid from general assets.
- Residuary gifts dispose of the remainder of the estate after all other gifts and debts.
- Gifts may fail by ademption (specific gifts) or lapse (beneficiary predeceases the testator).
- The classification of a gift determines how it is fulfilled and what happens if it fails.
Key Terms and Concepts
- specific gift
- general gift
- demonstrative gift
- pecuniary gift
- residuary gift
- ademption
- lapse
Demonstrative Gifts and Insufficient Funds (continued)
If a demonstrative gift cannot be fully satisfied from the specified fund, the shortfall is paid from general assets. If the fund does not exist at all, the gift is treated as a general pecuniary gift.
Residuary Gifts (continued)
The residuary gift covers all property not otherwise disposed of. If a residuary beneficiary predeceases the testator and there is no substitution, their share passes under the intestacy rules.
