Types of Legacy in a Will: Specific, General, Demonstrative, and Residuary
The four types of testamentary gift follow different rules for ademption, abatement, and CGT. Knowing the difference helps you write a will that works as intended.
The Four Types at a Glance
Specific legacy
Ademption risk'I give my gold Rolex watch to my son Tom'
A gift of a particular, identified item of property. The item must exist and belong to the testator at death. If not, the gift fails (ademption).
Abatement: Last to abate — only taken after residue, then demonstratives, then generals are exhausted.
General legacy
'I give £10,000 to my daughter Sarah'
A pecuniary or other gift of property not specifically identified. The estate must provide assets of that type. Not subject to ademption — the estate must find the money from wherever it can.
Abatement: Abates after residue is exhausted, before specific legacies.
Demonstrative legacy
'I give £10,000 to be paid from my Barclays current account to my nephew'
Directed to come from a specific fund. If the fund exists, the gift is taken from it (like a specific legacy). If the fund doesn't exist at death, it falls on the general estate (like a general legacy) — not adeemed.
Abatement: Treated as specific to the extent the fund exists; general to the extent it does not.
Residuary gift
'I give the rest of my estate to my partner'
Everything left after all specific, general, and demonstrative legacies and after all debts and expenses have been paid. The residuary beneficiary takes what is left.
Abatement: Abates first — the residue is depleted before any other legacy class when the estate is insufficient.
Frequently Asked Questions
What is a specific legacy and why does it carry a risk of ademption?
A specific legacy is a gift of a particular identified item of property — 'my diamond engagement ring', 'my Land Rover Defender', 'my shares in Barclays plc'. The gift is of that specific thing and no other. The risk is ademption: if the specific asset no longer exists in the estate at the date of the testator's death — because it was sold, given away, destroyed, or converted into something else — the gift fails. The beneficiary receives nothing and has no claim on the general estate for a substitute. For example, if a testator leaves 'my holiday cottage in Cornwall' and sells the cottage five years later without updating the will, the gift of the cottage is adeemed and the beneficiary loses out. This is why specific legacies should be regularly reviewed.
What is the difference between a general legacy and a demonstrative legacy?
A general legacy is a gift that the estate must provide from its general assets — most commonly a sum of money ('I give £5,000 to my friend'). A demonstrative legacy is a pecuniary gift directed to come from a specific fund ('I give £5,000 from my Halifax savings account to my friend'). The critical difference is behaviour when the specific fund is insufficient or non-existent: a general legacy has no named source and must be paid from the general estate if available. A demonstrative legacy — if the fund does not exist at death — does not fail (unlike a specific legacy). Instead, it falls onto the general estate for the shortfall and is treated as a general legacy to the extent the fund cannot cover it. This hybrid nature is why demonstrative legacies are sometimes called 'hybrid' gifts.
In what order do legacies abate when an estate is insufficient to pay all?
Abatement is the process by which legacies are reduced when estate assets are insufficient to pay all gifts in full. The order is: (1) the residuary estate is depleted first — the residuary beneficiary or beneficiaries bear the first burden of any shortfall in the estate; (2) demonstrative legacies abate next (to the extent they cannot be paid from the named fund); (3) general legacies abate proportionally — all general legatees suffer a proportional reduction; (4) specific legacies abate last — they are the most protected class. The testator's intention is preserved as far as possible: specific gifts are kept intact until everything else has been exhausted. Within each class, legacies abate proportionally — so if there is not enough to pay two general legacies of £10,000 and £5,000, each is reduced by the same percentage.
Does the type of legacy affect Capital Gains Tax?
Yes. For CGT purposes: (1) specific legacies — the personal representative's acquisition of the asset is treated as at market value at the date of death (no CGT on the uplift to market value at death — TCGA 1992 s62); when the specific asset is appropriated to the legatee, that appropriation is treated as a disposal at market value (unless the legatee elects to take at the PR's acquisition cost under TCGA 1992 s62(4)); (2) general legacies (cash) — no CGT issue on cash; (3) if the estate sells assets to raise cash to pay general legacies, the sale is a disposal by the personal representative subject to CGT on the gain since the date of death value; (4) residuary beneficiaries — CGT is calculated on the cost of the residuary assets to the personal representative (the probate value), not the original cost to the deceased, so the estate's CGT position can be complex where significant gains have arisen since death.
What happens if a specific legacy in a will refers to property that has significantly changed?
Where the subject matter of a specific legacy has changed in form but not in substance — for example, shares that have been reorganised, a bank account that has been transferred to a new account at the same bank — the courts may apply the 'change of form not substance' exception to prevent ademption. If a testator owned shares in Company A and those shares were converted into shares of a successor Company B by way of a corporate merger, the gift of 'my shares in Company A' is not adeemed — the new shares in Company B are substituted. Similarly, if the specific asset was compulsorily acquired (e.g. by a local authority) and the testator received compensation, courts have sometimes held that the compensation stands in place of the asset. These exceptions are narrow: a voluntary sale by the testator of the specific asset will generally be treated as ademption with no right to the proceeds.
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