Frequently Asked Questions
What Is A Bequest? Bequests are the actual gift disbursal's that result, upon one's
passing, from a specifically worded commitment in a will or trust agreement.
Bequests are unlike any other gifts we receive because they represent
individuals' final statements about what is most important to them. Every
bequest is a powerful expression of loyalty, good will, and faith in the
future of us and our mission.
I'm Not Wealthy, Can My Bequest Still
Make A Difference? You do not have to be wealthy to create a legacy.
A bequest of any size can be significant in helping to preserve our mission
and our reach.
I have a will. Do I need anything
else? In addition to a will, most experts recommend that you have
a durable power of attorney, which allows another person to act on your
behalf should you become incapacitated. Also, a living will is helpful
to your heirs in that it directs at which point you do not want your life
Can bequests be handled in a living
trust? Certainly. You may wish to consider a living trust as an
estate planning tool. More information is available. Living trusts may be either revocable or irrevocable and
there are advantages and disadvantages to consider in both.
happens to my personal possessions? Personal possessions are best
distributed through a tangible personal property memo in which you list
the personal items you wish to give to specific people. Your will must
mention the existence of this memo and you should keep a copy of it with
Can land or real estate be used as a charitable gift? Yes, and it often is. Because it is not immediately marketable in the same manner as securities, land or developed real estate is a little more complex as a gift. Farms, homes, vacation homes, apartment houses and commercial real estate are some examples of gifts of real estate. Some information regarding the benefits of a gift of real estate is available in our section on real estate. A particular type of a charitable remainder trust is often used to complete the gift.
If a trust agreement is established
as irrevocable, it means that it can't be revoked (broken) except under
unusual circumstances. Why would anyone want an irrevocable trust? There
are always specific reasons for making an irrevocable trust agreement.
Perhaps it involves a family business where some of the family members
are getting on in years and the family wants to make certain that management
continues to run smoothly even if hindrances, such as senility, enter
Many times the reasons for an irrevocable trust involve estate and/or
income tax avoidance. In order to be successful in such avoidance, the
trustor must not have any direct or indirect power or control over the
trust property or income. The regulations on this subject, set out in
the Internal Revenue Code, must be carefully followed.
What is the difference between a
charitable remainder unitrust and a charitable remainder annuity trust? The major difference is in the valuation of the assets of the
trust, which establishes part of the calculation for the determination
of the amount of income received by the income beneficiary(-ies). The
annuity assets are valued at the time the assets are placed in the trust
and are never revalued. Annual payments remain the same, whether the assets
appreciate (increase in value) or decline (lose value).
The assets in the unitrust are revalued annually. If the trust assets
appreciate, the payment to the income beneficiary(-ies) will increase.
If the trust assets depreciate, the payment will decrease.
What happens to my assets in a trust
for a charity if the charity goes out of business before the expiration
of the trust? Your trustee is authorized to name a substitute,
if that is the sole charity.
Should I name a charity as trustee
of my charitable remainder trust? This is often done if the organization
is qualified to so act under local law. The organization's representatives
can satisfy you in that regard. Often they will serve without fee, which
is an additional incentive.
How often should I update my will
or trust? These documents should be updated any time your financial
or your family circumstances change. As laws vary from state to state,
if you move you should have an attorney licensed in and familiar with
the new state's laws review your will or trust agreement. It is always
wise, even if there are not any significant changes in your circumstances,
to periodically review these important documents. A good rule of thumb
is to review your will every three years.
Can I use my insurance to benefit
charitable organizations? Yes. This is an area overlooked by many.
You can name one or more charities as alternate or as primary beneficiary.
Furthermore, if you no longer need the policy proceeds in your estate
for use now, you can transfer ownership of the policy to the charity or
the policy has cash loan value, the charity can draw this out and use
it. In this case, you not only receive a charitable gift deduction, but
any additional premiums you pay are tax deductible for you now. And, on
your death, the charity receives the balance of the policy proceeds and
none of it is included in your estate for tax purposes.
can I fund a charitable gift annuity and how is my income calculated?
usual funding sources for a charitable gift annuity are cash and marketable
securities. There can be tax benefits associated with the gift of appreciated
securities (the current market value exceeds the cost or basis value).
As a gift annuity is considered partially a gift and partially an annuity,
part of the gift avoids capital gains tax entirely. Real estate and other
marketable assets may also be used. Generally, the charity will convert
the assets to cash to fund the annuity.
The income provided
you by the annuity is determined by your age and the age of any additional
beneficiary and is calculated using tables established and filed with
regulatory agencies under which the charity operates its annuity program.
I set up a charitable gift annuity and delay the start of the income until
I will more likely need it, such as at my retirement, when my income is
there is flexibility in the establishing of charitable gift annuities
that make them a popular and effective retirement planning vehicle. Using
a deferred gift annuity, the annuity earnings accumulate on a tax-deferred
basis. Thus the deferred payment annuity accomplishes several things.
First, the donor receives a tax deduction in the year the annuity is established,
which is usually when the donor is in a higher tax bracket. Secondly,
the gift to the charity becomes larger as the deferred earnings increase
the annuity's principal. Finally, since the deferred payment annuity grows
in size while income is deferred, the ultimate income will be more per
Return to the Legacy Giving home page or to the Quick Guide to Legacy Gifts.