Paralegal Advanced Competency Exam (PACE) Practice Exam

What defines a class gift in legal terms?

1. An individual gift specifically named in a will

2. A group of beneficiaries identified by a general term

3. A lifetime gift to a specific charity

4. A bequest that requires formal probate

The correct answer is: A group of beneficiaries identified by a general term

A class gift is defined in legal terms as a gift made to a group of beneficiaries identified by a general term, rather than naming each individual beneficiary specifically. This legal concept allows for a predefined group to receive a gift, which provides flexibility and simplifies the distribution process if new members join the class (for example, children born to the named group after the will was executed may also receive a share). This is distinct from other types of gifts defined in the options; an individual gift specifically named in a will refers to a bequest addressed to a particular person rather than a group. A lifetime gift to a charity would not be classified as a class gift since it pertains to a specific entity rather than a class of people. Finally, a bequest requiring formal probate does not define a class gift as it refers to the legal process required to administer a decedent's estate, which is not a characteristic of the gift itself. Thus, the characteristics of a class gift support the definition given in the correct choice.