Florida Probate Litigation Lawyer Blog
A class gift is a sum of assets that is given to and divided among a group of beneficiaries. The beneficiaries of a class gift are a group that can be expected to expand or contract between the time of will execution and the testator’s death. A class gift allows a testator to identify a group of beneficiaries in relation to their status or membership in a defined class, rather than identifying individuals particularly.
The Restatement explains that a class gift is “a disposition to beneficiaries who take as members of a group. Taking as members of a group means that the identities and shares of the beneficiaries are subject to fluctuation.” Further, the Restatement says that a “disposition is presumed to create a class gift if the terms of the disposition identify the beneficiaries only by a term of relationship or other group label. The presumption is rebutted if the language or circumstances establish that the transferor intended the identities and shares of the beneficiaries to be fixed.” RST (3d) §13.1.
A testator may want to leave a class gift if they want to devise property to a dynamic group, meaning a group whose membership can or may change over time. For example, a will may leave an asset to a group identified by language such as “my siblings,” “my nieces and nephews,” or “my children,” rather than by explicitly identifying the intended beneficiaries by name. A class gift avoids the necessity of revising the will when a member of the class later is born or dies. For example, a gift given “to my grandchildren” will include a grandchild already living when the testator executed their will, as well as other grandchildren later born following execution of the will. The enables the testator to leave a gift to all of their grandchildren without having to redo their will each time a new grandchild is born. Further, while groups are usually considered closed when the testator dies, there may be exceptions. For example, a child conceived but not born before the testator’s death could be considered a member of a group of the testator’s children.
One benefit of leaving a class gift is arranging so that only those class members who survive the testator take from a class gift. For example, a will could say “I give $15,000 to each of my nieces and nephews who survive me by 100 days.” Another advantage to leaving a class gift is that it may prevent lapses from occurring. If a gift is to a class but a member of that class passes away, the predeceased class member’s devise may be redistributed to surviving members of the class.
A disadvantage of leaving a class gift is that disputes may occur about who is included in the group and when the group closes. For example, a will may leave a gift to a group described as “my book club,” but questions may arise about what makes someone a member of that particular group, such as frequency of attendance, level of involvement, or date of entry.
If you wish to include a class gift in your estate plan, it is important to consult with an experienced estate planning and estate administration attorney to properly advise you as to the appropriate language in accordance with your own particular circumstances. The Miami Estate Planning attorneys at Chepenik Trushin LLP are ready, willing, and able to assist you in any way with regard to all of your estate planning needs.
