Charitable Bequests Simple, Yet Often the Most Meaningful Gifts
A Charitable Bequest is simply a distribution from your estate to a charitable organization through your Last Will and Testament. There are different kinds of bequests. For each, you must use very specific language to indicate the precise direction of your assets and to successfully carry out your wishes.
Charitable bequests are unique in that they enjoy unlimited deductions from federal and most state inheritance taxes.
Do you have an estate?
Your “estate” is the sum of your assets, including property you own, insurance policies, retirement accounts, cash on hand, etc. Although we often think it is a wealthy person who makes a charitable estate gift, even people who are not “wealthy” have the ability and the resources to make a charitable bequest. If every adult in America made a Will and included a bequest of just $100, billions of dollars would flow to charitable causes every year.
Following are some of the most common kinds of bequests as well as sample language for making a bequest. You should always carefully review the terms of your Will and recommend that you do so with the help of a professional trained in handling estates and trusts.
General Bequests are gifts that are left to individuals or causes and come from the general value of an estate. A bequest gift can be made by designating a specific dollar amount, a particular asset or a fixed percentage of your estate to the cause of your choice. The language to make a general bequest is as follows:
I give, devise, and bequeath to NAME OF CHARITY/LOCATION the sum of $_____ (or a description of the specific asset), for the benefit of NAME OF CHARITY and its general purposes.”
Specific Bequests are made when a particular item or property is bequeathed for a designated purpose (i.e. instruments bequeathed to a local school district for use in music education; dollar funds to be used in the operation of a healthcare organization or church). The language used to make a specific bequest is as follows:
I give, devise, and bequeath to NAME OF CHARITY/LOCATION the sum of $____ (or a description of a specific asset) for the benefit of NAME OF CHARITY to be used for the following purpose: STATE THE PURPOSE. If at time in the judgement of the trustees of NAME OF CHARITY it is impossible or impracticable to carry out exactly the designated purpose, they shall determine an alternative purpose closest to the designated purpose.”
Residuary Bequests are made when you intend to leave the residue portion of your assets after other terms have been satisfied. The language used to make a residuary bequest is as follows:
All the rest, residue, and remainder of my estate, both real and personal, I give to NAME OF CHARITY/LOCATION for its general purposes.”
Contingency Bequests allow you to leave a portion of your estate to a particular charity if your named beneficiary does not survive you. The language used to make a contingency bequest is as follows:
I devise and bequeath the residue of my property, real and personal and wherever situated, owned by me at death, to NAME OF BENEFICIARY, if SHE/HE survices me. If NAME OF BENEFICIARY does not survive me, I devise and bequeath my residuary estate to NAME OF CHARITY/LOCATION for its general purposes.”
Remember, without a Will, there is no mechanism in place to assure your assets are distributed as you wish, including any gifts to family, heirs, or those causes most important to you. The following are a few steps you should take to make sure your wishes are granted:
Make a list of organizations or causes you would like to support
Make a detailed list of your assets (financial, real estate, vehicles, jewelry, collectibles, musical instruments, etc.) Make an appointment with your financial advisor or attorney or a planned giving officer at the organizations you wish to support. Any of these individuals will help sensitively guide you through the process. The preceding information was reproduced, in large part, from the national Leave A Legacy website at www.leavealegacy.org. This information is not intended to replace the advice of an accountant or attorney.