Legal Definitions - class gift

A class gift refers to a gift made in a will or trust to a group of beneficiaries identified by a collective description, rather than by naming each individual person. The defining characteristic is that the exact number of beneficiaries and their individual identities may not be fixed at the time the will or trust is created, but rather at a later point, such as when the gift is distributed or "vests." Each member of the class typically receives an equal share of the gift, and the class can expand or contract until the gift is finalized.

• Example 1: Grandchildren's Inheritance

  An elderly woman, Eleanor, writes a will stating, "I leave $300,000 to be divided equally among my grandchildren." At the time she writes the will, Eleanor has three grandchildren. However, before she passes away, a fourth grandchild is born. Because the gift is to the "class" of her grandchildren, all four grandchildren will share the $300,000 equally, each receiving $75,000, even though the fourth grandchild wasn't born when the will was originally drafted. The class expanded to include the new member.

• Example 2: Sibling's Children Receiving Property

  John's will specifies, "My vacation home shall be given to the children of my brother, Michael." When John wrote his will, Michael had two children. Years later, before John's death, Michael had a third child. This third child, along with the first two, will be considered part of the "class" of Michael's children and will inherit an equal share of the vacation home, as the gift was defined for the group rather than specific named individuals. The gift was intended for the collective group of Michael's offspring.

• Example 3: Trust for Nieces and Nephews

  A trust document created by Aunt Sarah states that upon her death, "the remaining balance of my investment portfolio shall be distributed equally among my nieces and nephews." At the time Sarah created the trust, she had five nieces and nephews. However, over the years, two more nieces were born to her siblings. When Sarah passes away, the investment portfolio will be divided into seven equal shares, one for each of her nieces and nephews, because the trust identified them as a flexible group (a class) rather than listing them by name. The gift adapts to the changing composition of the specified family group.