How to Leave Money in a Will

A pecuniary legacy is a gift of a fixed sum of money, for example leaving two thousand pounds to a godchild or five hundred pounds to a friend. It is distinct from a residuary gift, which is a share of whatever is left over, and from a specific gift, which is a named item rather than money.

Cash legacies are usually paid out of the estate before the residue is calculated and distributed, which means residuary beneficiaries only receive what is left once all specific gifts, legacies, debts, funeral costs and tax have been settled.

When leaving money to someone, it helps to identify them clearly, using their full name and, ideally, their relationship to you, to avoid confusion if there is more than one person with a similar name in the family. State the amount plainly as a fixed sum, such as one thousand pounds, rather than a vague description.

If you want a gift to be conditional, for example only paid if the recipient reaches a certain age, this needs to be drafted carefully, since money left to a minor is normally held on trust by the executors until the condition is met.

If, after debts and expenses, the estate does not have enough left to pay all the pecuniary legacies in full, the legacies are usually reduced proportionately, a process known as abatement, unless the will sets out a different order of priority.

This is one reason it is worth reviewing your will periodically, particularly if your assets or debts change significantly, to check that the gifts you intend still reflect the likely size of your estate.

A fixed cash gift written many years before it is paid can lose real value to inflation. Some people choose to index-link legacies, so the amount rises in line with a named index, to preserve its intended value over time.

This is a matter of personal preference and depends on how far in the future the gift is likely to be paid and how important it is to you that the recipient receives a specific real-terms amount rather than a fixed figure.

Suppose a will leaves 10,000 pounds each to two friends and the residue to a spouse, but after debts and funeral costs only 15,000 pounds is left before the residue is calculated. Because there is not enough to pay both legacies in full, they abate proportionately, so each friend would receive 7,500 pounds instead of 10,000 pounds, unless the will states a different order of priority for the gifts.

This example shows why it is worth checking, when reviewing a will, that pecuniary legacies remain realistic given the likely size of the estate, particularly if debts, care costs, or a fall in asset values could reduce what is available.

Simple, modest legacies to family and friends rarely need professional input beyond clear drafting. Advice becomes more useful where legacies are large relative to the estate, where you want to attach conditions, such as an age requirement, or where you are concerned the estate might not comfortably cover all the gifts you intend to make.

A solicitor can also help word a legacy so that it fails gracefully, for example providing that if the estate cannot cover it in full the recipient receives whatever proportion is available, rather than leaving the position unclear.