A demonstrative bequest is best described as which of the following?

A demonstrative bequest is best described as which of the following?

• A. Specific bequest
• B. General bequest
• C. Residuary bequest
• D. Demonstrative bequest

Answer: (D)

This question tests your understanding of bequest types, especially how a demonstrative bequest is funded. A demonstrative bequest is a fixed amount that's designated to be paid from a specific source of assets, such as “from the proceeds of my stock in XYZ Corp.” The key feature is that the payment is tied to that particular fund. If the designated source yields enough, the beneficiary receives the full amount from that source; if not, the shortfall can be covered from the estate’s general assets. This sets it apart from a specific bequest, which is a gift of a particular item itself, and from a general bequest, which is a fixed amount payable from the estate’s assets with no designated source. A residuary bequest concerns what remains after all other bequests are satisfied. The defining idea here is the funding source is named for the payment, with any shortfall potentially drawn from general assets.

This question tests your understanding of bequest types, especially how a demonstrative bequest is funded. A demonstrative bequest is a fixed amount that's designated to be paid from a specific source of assets, such as “from the proceeds of my stock in XYZ Corp.” The key feature is that the payment is tied to that particular fund. If the designated source yields enough, the beneficiary receives the full amount from that source; if not, the shortfall can be covered from the estate’s general assets. This sets it apart from a specific bequest, which is a gift of a particular item itself, and from a general bequest, which is a fixed amount payable from the estate’s assets with no designated source. A residuary bequest concerns what remains after all other bequests are satisfied. The defining idea here is the funding source is named for the payment, with any shortfall potentially drawn from general assets.