Wills with specific bequests of chattels ought to be avoided. If the assets are of particular sentimental value such as family heirlooms, then they need to be properly identified. It is always better to give a class gift in order to avoid misdescription. For example, what is to happen if the new Lexus is sold and another vehicle purchased in stead? The client should at least consider giving the jewellery, motor vehicles and war memorabilia as class gifts to her various children in order to avoid the failure of these clauses in the Will.
Devises of land:
Specific devises of land have more pitfalls than bequests of chattels. By way of example; A principle place of residence is likely exempt from capital gains tax (see s118.195 Income Tax Accessment Act 1997 (Cth)(‘ITAA’). Upon your death, the estate will take the property at the value or “cost base” as at the date of the Deceased’s death. The same cost base is then passed on to the expectant beneficiaries (if distributed within the executor’s year).
By contrast; a holiday home or investment property will likely not be exempt. Particularly if the holiday home was acquired after 20 September 1985 (the date Capital Gains Tax came into operation). This means that the cost base of the holiday property will be passed on to the beneficiary at the cost base the deceased acquired it (see s128.15(4) of the ITAA). When the expectant beneficiary disposes of the property there could be a significant tax liability attached to that asset. If this occurs the will makers testamentary intentions may not be fulfilled. Instructions need to be taken about this issue.