How to make a charity a beneficiary in your Will

How to make a charity a beneficiary in your Will

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Sharing some of your wealth with a good cause is a healthy impulse. Giving back can add a sense of purpose and joy to your estate planning.

The good news is that, if you want to leave some of your wealth to a charity, you need not be rich, and you don’t need to hire a team of lawyers. The process of designating a charity as a beneficiary in your will is a fairly straightforward process.

A will or trust is a way to make a plan for what happens to your money and belongings after you die. Just as you can designate family and friends as heirs, you also can leave money or property to nonprofit organizations.

A charitable bequest is a way to use language in your will to specify a donation to a charity, foundation, trust or other recipient. You need not be wealthy to make a charitable request – anyone can add this language to their will, for any amount.

When you create a trust-based estate plan with a provider such as Trust & Will, your revocable living trust will list the recipient of your gift and the amount you plan to leave. You can update the details over the years as factors such as the size of your portfolio change.

The first step is to think about what’s important to you. Who should get your money? Maybe it’s your church, a favorite school or museum, or the animal shelter where you volunteer.

You should also do some tax planning. Charitable bequests can cut your estate’s tax bill, making them an attractive and powerful way to spread your wealth.
While individual heirs may face a tax liability for the inheritances they receive from your estate, charitable giving receives a more favorable tax treatment, according to Trust & Will.

The types of bequests

Charitable bequests fall into four main categories:

  1. General bequest.This type of monetary gift is paid from the general assets of your estate.

  2. Specific bequest. This gift could take the form of a precise amount of cash, or of a piece of personal property, such as a work of art, a piece of jewelry or a vehicle.

  3. Demonstrative bequest. This is a sum of money paid from a specific source, such as a bank account or investment fund.

  4. Residuary bequest. This type of gift remits what’s left in the estate after it has satisfied other claims and paid other expenses.

You also can spell out what sort of recognition, if any, you’d like to receive in exchange for your gift. That could mean the nonprofit designates an award or scholarship in your name or someone else’s, or perhaps it’s planning for a sign, placard or other physical memorial at the organization’s property.


Learn More

Read: A quick guide to planned giving


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