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Bequest


A bequest is property given by will. Historically, bequest was used for personal property given by will and devise for real property. Today, the two words are used interchangeably.

The word bequeath is a verb form for the act of making a bequest.

Bequest come from Old English becwethan, "to declare or express in words" — cf. "quoth".

Part of the process of probate involves interpreting the instructions in a will. Some wordings that define the scope of a bequest have specific interpretations. "All the estate I own" would involve all of the decedent's possessions at the moment of death.

A conditional bequest is a bequest that will be granted only if a particular event has occurred by the time of its operation. For example, a testator might write in the will that "Mary will receive the house held in trust if she is married" or "if she has children," etc.

An executory bequest is a bequest that will be granted only if a particular event occurs in the future. For example, a testator might write in the will that "Mary will receive the house held in trust set when she marries" or "when she has children".

In some jurisdictions, a bequest can also be a deferred payment, as held in Wolder v. Commissioner, which will impact its tax status.

In microeconomics theorists have engaged the issue of bequest from the perspective of consumption theory, in which they seek to explain the phenomenon in terms of a bequest motive.

In order to calculate a taxpayer's income tax obligation, the gross income of the taxpayer must be determined. Under Section 61 of the U.S. Internal Revenue Code gross income is "all income from whatever source derived". On its face, the receipt of a bequest would seemingly fall within gross income and thus be subject to tax. However, in other sections of the code, exceptions are made for a variety of things that do not need to be included in gross income. Section 102(a) of the Code makes an exception for bequests stating that "Gross income does not include the value of property acquired by gift, bequest, or inheritance." In general this means that the value or amount of the bequest does not need to be included in a taxpayer's gross income. This rule is not exclusive, however, and there are some exceptions under Section 102(b) of the code where the amount of value must be included. There is great debate about whether or not bequests should be included in gross income and subject to income taxes, however there has been some type of exclusion for bequests in every Federal Income Tax Act.


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