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Can I Leave a Gift to Charity in My Will?
It is absolutely possible to leave a gift to a designated charity or charities in your will. Known as an endowment, legacy gift or planned giving, such testamentary bequests not […]
It is absolutely possible to leave a gift to a designated charity or charities in your will. Known as an endowment, legacy gift or planned giving, such testamentary bequests not only support causes that are important to you but may have financial benefits as well. For example, if you take out a life insurance policy with the charity as the beneficiary, you can usually deduct the premiums for that policy as a charitable donation while you are still alive. Charitable donations may also decrease the amount of any estate tax owed after your death. An estate planning attorney can help you determine if this is a wise course for you based on the value of your estate and your state laws.
In general, legacy gifts fall into four broad categories:
- General gifts: a specific amount of money or a percentage of your estate
- Residuary gift: any remaining assets after all other bequests and claims (for example, unpaid debts, taxes and administrative expenses) have been fulfilled
- Specific gift: the donation of a particular item, such as a piece of art or a car
- Contingent gift: a donation based on certain conditions being met, such as your main beneficiary passing away before you
Very often, legacy gifts are monetary — for example, an annual endowment of a certain amount of money to the charity of your choice. However, you may also make other charitable bequests in your will, including the following:
- Real estate, such as land or residential property you own
- Personal property, such as jewelry, antiques works of art or automobiles
- Stocks or bonds
- Proceeds of a life insurance policy or an individual retirement plan
- Partnership interest in a business
When planning your testamentary bequest, make sure to determine the correct name of the charity and, where applicable, the fundraising entity that collects donations on its behalf. (The names and addresses may be different, so contact the charity’s headquarters to make sure.) It may also be helpful to decide what you would like your gift to accomplish. For example, if you want to donate a certain amount of money to Habitat for Humanity to renovate 10 homes in your hometown, you will need to speak with an administrator at the charity to learn how much that will cost.
Sources
“Essential Estate Planning Documents”. LawDepot. https://www.lawdepot.com/estate-planning/?loc=US#.YGdoRWjYpD8
