What Is a "Devise" in My Estate Plan?
If you are thinking about creating an estate plan, you may hear some new and confusing terms that make your brain hurt. To add to your bewilderment, not only are some of the words unfamiliar, they may also be homophones—words that are pronounced the same as other words, but have different meanings and spellings. For example, an heir is a person who legally (under a will or according to state law) receives money or property from another person when that person dies. In contrast, air is an invisible gaseous substance made up primarily of oxygen and nitrogen that surrounds the earth. The two words sound alike, but obviously have vastly different meanings.
Likewise, if you have heard an estate planning attorney mention a devise, it is very different from a device—which usually refers to a piece of electronic or mechanical equipment. So exactly what is a devise in your estate plan? A devise is a legal term that traditionally has referred to a gift of real estate made by a will. However, in common usage, it has been used interchangeably with other legal terms such as a bequest, which traditionally refers to a gift made in a will of personal property—that is, property other than real estate. Courts will uphold the use of either term for a gift of real or personal property in a will if the will clearly shows that the person who created it (the willmaker) intended to make the gift.
Types of Devises
There are several different types of devises: general, specific, demonstrative, and residuary. The distinction between them is important, so we will provide a definition of each type.
A general devise (or general bequest) is a gift made in a will that does not direct the transfer of a specific piece of property, but rather is a gift of a specified quantity or value that is to be made from any property of the same general type that is part of the willmaker’s estate. For example, if Ward leaves his sons Beaver and Wally each a gift of $10,000, those gifts are general devises, and the executor of Ward’s estate may pay out those gifts from any account or other source of funds that Ward owns.
A specific devise (or specific bequest) is a gift made in a will of a particular account, parcel of real estate, or other item that that the willmaker intends for a beneficiary to receive. The executor may only satisfy a specific devise by delivering that exact account or other item: the gift may not be made from any other accounts or items in the willmaker’s estate, even if the specific account mentioned no longer contains any funds or the item has been sold or destroyed. For example, if Fred’s will specifies that his Canopysaurus Flintmobile is devised to his daughter Pebbles, the executor can satisfy the specific devise only by transferring that exact vehicle to Pebbles.
A demonstrative devise (or bequest) has elements of both general and specific devises because it is a general gift but the will specifies that it is payable from a specified fund or source of property. For example, if Mario’s will specifies that he leaves his brother Luigi a gift of $25,000 but also directs that the gift should be paid from the funds in Mario’s Bank of Mushroom Kingdom savings account, he has made a demonstrative devise. Similarly, if Mario’s will provides Luigi a gift of any three plungers in Mario’s extensive plunger collection, this is a demonstrative devise.
A residuary devise is a gift of all property or money that remains in an estate after all of the specific, general, and demonstrative devises have been made and all expenses, debts, taxes, and any other obligations of the estate have been paid. Typically, a will includes a residuary clause naming a beneficiary who will receive any remaining money or property to ensure that nothing, even property the willmaker has forgotten they own, will pass according to the state’s default rules, which may not reflect the wishes of the willmaker. For example, Lord Grantham’s will could contain a residuary clause stating “I give all of the residue of my estate to my third cousin once-removed, Matthew Crawley. If Matthew Crawley does not survive me, I give all of the residue of my estate to my heretofore unacknowledged son, Thomas Barrow.”
Why Does the Type of Devise Matter?
You might be surprised to learn that the type of devise has very significant implications. A legal concept called ademption refers to the withdrawal or nullification of a gift made by a will because the property identified in the will is no longer in the willmaker’s estate. Ademption does not apply to general or demonstrative devises; however it does apply to specific devises where the property described in a will is no longer in the willmaker’s estate when they die. It does not matter whether the property was intentionally or unintentionally removed from the estate. For example, if Fred’s Canopysaurus Flintmobile is stolen and never recovered, it will obviously be impossible for Pebbles to receive it as part of her inheritance. In some states, the law does not permit the substitution of other property to replace the specific devise that is no longer available. So, if the Canopysaurus Flintmobile was a substantial part of Pebble’s inheritance, she may receive much less than Fred intended. Fortunately, some states have nonademption statutes that provide certain exceptions, so that, in our example, Pebbles could receive insurance proceeds that have not yet been paid to Fred at his death because the Canopysaurus Flintmobile was totaled in an accident or receive the unpaid proceeds if Fred sold the vehicle to Barney but had not yet received the amount owed before his death.
Another situation in which the type of devise matters is when an estate is not large enough to cover all the gifts made by the will, administration expenses, creditors’ claims, and other obligations it may owe. Under the law, the doctrine of abatement determines the order in which types of devises are reduced (or even eliminated depending on the circumstances). Generally, the residuary devise is reduced first, then general devises, then demonstrative devises, and lastly, specific devises. This amounts to a presumption under the law that the highest priority of an estate is to make specific devises and that the other types of devises are progressively lower priorities. So, if after administration expenses, creditors’ claims, and other obligations are paid, Fred’s Canopysaurus Flintmobile is the only property left in his estate, Pebbles will receive her inheritance—but no other beneficiaries named in Fred’s will would receive an inheritance, even if that was not his intention.
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