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How to leave a Bequest in a will

A Guide to Charitable Bequests in a Will

Estate planning is the art of leaving a lasting legacy — a bequests in a will reflects the impact you wish to make on the world after your passing. For the charitable inclined, philanthropy becomes an integral part of this vision. Whether your estate is grand or humble, you can contribute significantly by including a charitable bequest in your estate plan. This guide outlines the steps to leave a meaningful legacy through charitable giving.

What is a Charitable Bequest?

A charitable bequest is a gift or donation specified in your estate plan, directing assets or funds to an organization of your choice. This can be accomplished by including a bequest in your Will or Trust, ensuring your chosen charity benefits from your generosity. The trustee or executor is entrusted with the responsibility of facilitating the proper transfer of the gift to the designated organization. Beyond monetary gifts, valuable or collectible items relevant to the organization’s cause can also be bequeathed.

Why Leave a Charitable Bequest to a Nonprofit?

For those already considering a charitable bequest, several compelling benefits might reinforce your decision:

1. Tax Benefits:

  • Charitable bequests offer tangible tax advantages, especially for estates valued over $11.7 million, which may owe federal taxes.
  • It provides a legitimate strategy to reduce overall taxable estate, potentially minimizing or eliminating federal and state taxes.

2. Flexibility:

  • Charitable bequests are adaptable. Unless specified as irrevocable, you can update your estate plan at any time, even revoking it if circumstances change.

3. Create a Legacy:

  • Leaving a charitable bequest in a will ensures a positive impact on the world, creating a lasting legacy and the potential for your name to be associated with charitable endeavors.

How to Leave Charitable Bequests in Will for Nonprofits

Ready to bequeath gifts to charity? Follow these four simple steps:

1. Research Nonprofits of Interest:

  • Explore various nonprofit organizations, aligning with your values and interests.
  • Consider charities, educational institutions, museums, hospitals, cultural centers, religious organizations, or other causes.

2. Decide the Type of Bequest:

  • Choose between a percentage, specific, or residual bequest based on your preferences and estate planning goals.

3. Create or Update Your Will:

  • If you don’t have an estate plan, create one. If you already have one, update it to include your charitable bequest.
  • Clearly state the nonprofit’s name, the type of bequest, and the specified gift amount or percentage.

4. Inform Friends and Family:

  • Communicate your decision to friends and family, ensuring transparency about your charitable intentions.
  • Notify the chosen organization about your bequest, allowing them to make necessary arrangements in advance.

Need to create a will that includes a Bequest?

Are you ready to start crafting your legacy? Beginning February 2024, The U.S. Will Registry offers a comprehensive will creation program with a unique feature. Easily integrate a charitable bequest into your estate plan, aligning with organizations that resonate with your values.

What Is Bequeathing to Charity?

Beyond traditional check-writing, there are diverse ways to integrate charitable giving into your estate plan:

1. Cash Donation Through Your Will:

  • Allocate a specific amount or percentage of your estate to your preferred charity.
  • Options include a general gift, residual gift, or contingent gift based on specific conditions.

2. Donating Investments to Charity:

  • Directly donate stocks, bonds, or mutual funds to a charity, potentially saving on capital gains taxes.
  • Ensure larger charities have efficient brokerage relationships for transferring stocks.

3. Naming a Charity as Your Life Insurance Beneficiary:

  • Designate a charity as a beneficiary on your life insurance policy, allowing customization of payout percentages.
  • Explore policies with charitable giving riders, contributing a percentage of the policy’s face value to charity.

4. Bequeath a Specific Object to Charity:

  • Consider donating tangible items like historically significant heirlooms or cars.
  • Claim a tax deduction for the fair market value or auction price, depending on the charity’s approach.

5. Charitable Annuity:

  • Explore annuities for planned giving, with regular payments received in return for the donated amount.
  • Consider the potential tax advantages and disbursement percentages based on age.

6. Open a Donor-Advised Fund:

  • Set up a donor-advised fund (DAF) for charitable giving, allowing contributions to grow tax-free until distribution.
  • Conveniently contribute assets and decide on recipients later, enjoying tax deductions in the current year.

Benefits of Leaving Money to Charity

Leaving a charitable bequest offers emotional benefits beyond financial considerations:

  • Care for Others: Provide critical resources for those in need, contributing to food, shelter, medicine, and more.
  • Support a Cause: Contribute to arts institutions, environmental organizations, medical research charities, and more.
  • Connect with a Beneficiary: Forge a meaningful connection by leaving money to an organization that aligns with your values.
  • Leave a Legacy for Your Name: Establish a memorial fund, scholarship, or support for a cause important to you.

How Leaving Money to Charity Affects Your Taxes

Understand the implications of leaving money to charity in the context of estate taxes:

  • Estate Taxes: Evaluate estate tax implications, especially if your estate exceeds the exclusion limit of $11.7 million.
  • Tax Deductions: Explore whether giving while alive provides more significant tax advantages against yearly income tax.

In conclusion, your will is not merely a legal and financial document—it is an expression of your values and a means to make a positive impact. By incorporating charitable bequests, you shape a legacy that extends beyond your lifetime, contributing to the betterment of causes close to your heart. Discover the ease of building in a charitable bequest with The U.S. Will Registry’s program, ensuring your philanthropic desires are seamlessly integrated into your estate plan.

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