Bequests

Gifts from Your Will or Trust (Bequests)

• Charitable bequests are made through a will, a legal document specifying how an individual’s property is to be distributed after death.  Some donors use a revocable (or “living”) trusts as their estate document instead of a will.  A distribution from a revocable trust.

• Works the same as a bequest under a will to deliver a gift to you, and it produces the same tax consequences for the donor.

• A bequest can give your organization a specific dollar amount or asset (a specific bequest) or a percentage of the donor’s net estate.  It can also be payable to your organization if, for example, a spouse or child predeceases the donor.

• As an alternative to naming your organization in their will or trust, many donors prefer the simplicity of completing a Change of Beneficiary Form to name your charity as a beneficiary of a part or all of their bank account, brokerage account, or life insurance policy.

• A donor can also name your organization as a percentage or full beneficiary of his/her traditional IRA or other retirement plan.  Distributions at death to charity are tax-free, but will be subject to income tax and possibly estate tax when left to a spouse, child or other loved one.

Benefits/Challenges

• Bequests are revocable and are not payable until death.  Donors have the comfort of knowing that they can amend or revoke a charitable bequest if their circumstances or family needs change.  You can promote bequests as the gift that costs a donor nothing during his lifetime.

• More positively for you:  bequests can be combined with lifetime gifts for immediate impact, or made “irrevocable” by signing a binding pledge if, for example, the donor wants name recognition now.

• Any of these income generating vehicles (Gift Annuities, Charitable Remainder or Lead Trusts) can be established at death by way of a will or living trust.

• Charitable bequests are made through a will, a legal document specifying how an individual’s property is to be distributed after death.  Some donors use a revocable (or “living”) trusts as their estate document instead of a will.  A distribution from a revocable trust  works the same as a bequest under a will to deliver a gift to you, and it produces the same tax consequences for the donor.

• A bequest can give your organization a specific dollar amount or asset (a specific bequest) or a percentage of the donor’s net estate.  It can also be payable to your organization if, for example, a spouse or child predeceases the donor.

• As an alternative to naming your organization in their will or trust, many donors prefer the simplicity of completing a Change of Beneficiary Form to name your charity as a beneficiary of a part or all of their bank account, brokerage account, or life insurance policy.

• A donor can also name your organization as a percentage or full beneficiary of his/her traditional IRA or other retirement plan.  Distributions at death to charity are tax-free, but will be subject to income tax and possibly estate tax when left to a spouse, child or other loved one.