Bequests: Wills and Trusts
Goal: Defer a gift until after your
Benefit: Your donations are fully exempt from federal estate tax and you retain control of your assets
Perhaps the worst word ever heard in probate is intestate, dying without a will. Dying intestate prolongs the distribution of assets and in some cases precludes heirs from benefiting from a decedent's estate. Dying intestate empowers the state in which the person died to distribute the assets of the person who died according to the laws of that state.
Everyone should have a will. If you have not written a will yet, regardless of your charitable intent, please consider this for it is a gift to your loved ones. A will ensures that assets are distributed as planned, and that other property is passed on per the decedent's wishes.
Pam Adams is a retired nurse, mother, and grandmother and is still a very busy woman. She loves to travel to places she has always dreamed about visiting, and when she can't take a trip, thoroughly enjoys traveling - via her radio - on the many journeys offered by her public radio station.
When not traveling or spending time with her grandchildren, Mrs. Adams volunteers her time at her local station. "I love going behind the scenes and helping out," she says.
According to Mrs. Adams, "Public broadcasting is a part of my family, and I want it to bring to my children and grandchildren the things that I treasure. And if I can help these children open their eyes and see the possibilities, I've done more than I ever dreamed of."
In addition to the emotional rewards of knowing what her gift means to something she loves, there are also long-term tax benefits because charitable bequests can reduce estate taxes (see bequest information). And there can be other tax benefits as well if the bequest involves appreciated assets.
In addition to enabling her to satisfy her charitable desires, this was a wise financial move as she needed to retain control of her assets for future contingencies. While she knew the future is uncertain, Pam wanted to be sure that what she didn't need would go to help others. She also understood the importance of having a will.
For information regarding living trusts, please click here. To look at examples of bequest language, please click here for more information. There is some additional information available about the benefits of utilizing a charitable bequest and how bequests enable you to keep control of your assets. Also, bequests are often used to build an endowment, a fund that provides a legacy for you and provides for the future of WFAE 90.7fm. Codicils are a simple and easy way to make changes to an existing will.
Using funds from a retirement account to make bequests is often a good strategy. If there is a balance in your retirement account at your death, not only is there a potential income tax burden, but there may be estate taxes as well. Estimates are that taxes could eat up as much as 70-75% of retirement assets under certain circumstances. Careful planning concerning retirement funds needs to be done. Please click here for additional information regarding retirement assets.
Another option to consider in making a gift is to use life insurance policies that are no longer needed or necessary. Please click here for more information about different ways to make a gift of life insurance.
Often, donors are surprised both by how wonderful they feel about helping others and by the size of the gift they are able to make through a bequest. Ann and David found their experiences with charitable giving enriched their hearts and lives.
For more information or a confidential discussion of your charitable options, please email or call the Major Gifts Associate , Jorge Fernandez, at (704) 926-9327.