Bequests: Will and Trusts

Goal: Defer a gift until after your lifetime
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.

David and Ann established a fund that would provide an annual income to pay some expenses. They had initially made an outright gift of some appreciated stock, taking advantage of the tax benefits, and later changed their Will to include a bequest that will magnify the scholarship tenfold.

Ann: "We felt good about helping through establishing a small fund. But we had no idea what the experience would bring to us."

David: "Over the years, we have since met with some of the staff and a few of the clients. I can't describe how good it feels to sit with these young people, to hear them describe their dreams and ambitions. To realize that we have become a part of their future and that they have become a part of our family."

Ann: "I feel like we really have accomplished something good!"

In addition to enabling them to satisfy their charitable desires, this was a wise financial move as they needed to retain control of their assets for future contingencies. While they knew the future is uncertain, Ann and David wanted to be sure that what they didn't need would go to help others. They 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 Keystone Human Services. 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 Danielle Ruddy at 717-232-7509.

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