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A bequest is a term that describes the act of giving assets such as cash, bonds, stocks, jewelry or any valuables, to individuals or organizations (usually nonprofits), through one's will or trust. Basically it's a gift of personal property by means of a will.
If the gift through one's will is real estate, it is called a devise.
For the purpose of Bequests.com, we will focus on bequests made to charitable organizations only, and not those made as part of a family inheritance, for example.
Individuals must leave instructions in their will or trust regarding a charitable bequest. These instructions may be complicated or straightforward. For example, some donors may stipulate how the nonprofits may spend the funds donated via the bequest.
Donors may inform the charities they place in their will, but many do not. This is why a thriving legacy giving program at your nonprofit is so essential. Explore how to build a planned giving program and build meaningful relationships with those who care so deeply about your mission they plan to leave your organization in their will.
We spend a lifetime building, preserving and managing our estates. Thus, it is only right that we make thoughtful choices about how our estate will be distributed at death. Another critical issue for people with minor children is who will become the legal guardian of the children in the event of an untimely death of both parents. A will is essential to accomplishing these objectives. (Jointly owned assets and named beneficiaries of a life insurance policy or retirement plan will not be affected by the lack of a valid will, unless those named are no longer living.)
A gift through your will or trust could be right for your donors if
In the event that such use should prove to be impracticable or undesirable for any reason as the Trustees may determine, in their sole discretion, they shall then provide for alternative uses of the fund in a manner consistent with and reflecting the spirit of the original gift.
Below are examples of how to indicate a general or undesignated gift to your nonprofit.
I give, devise, and bequeath to [your nonprofit], Inc. TAX I.D. #12-345678, all [or state the fraction or percentage] of the rest, residue, and remainder of my estate, both real and personal. [Your nonprofit] may be contacted at 123 Nonprofit Street, Anytown, PA, 123456; 1-800-555-1212.
I give, devise, and bequeath $
to [your nonprofit], Inc. TAX I.D. #13-1788491. [Your nonprofit] may be contacted at 123 Nonprofit Street, Anytown, PA, 123456; 1-800-555-1212.”
Declaration of Support Letter: Donors should send a Declaration of Support Letter to their local Society Estate and Asset Services Director.
Everyone has an estate plan, whether they think they do or not. In the unfortunate case that an individual passes without a valid will, the laws of the donor’s state of residence prescribe how and to whom the estate will be distributed — very possibly in a way that the donor did not intend. Regardless of means, everyone who has an opinion about how they’d like their estate to be distributed needs a will.
This is the court that determines the validity of a will and provides judicial oversight over the distribution of the estate. If there is no valid will, then the probate court will oversee the distribution of the estate according to the state’s intestacy laws.
Non-probate assets are any assets in an individual’s estate that will pass to beneficiaries by operation of law rather than according to the will. Examples include assets held in a living trust, jointly-held property such as real estate and bank accounts, and assets that will pass pursuant to a beneficiary designation (such as life insurance proceeds, brokerage accounts, and retirement plans). Whether an asset passes through probate or not has no impact on the estate tax ability of the asset. Non-probate assets often comprise most of the individual’s estate, so it’s important for potential donors to focus closely on all types of assets that will pass as part of a comprehensive estate plan.
This is a simple amendment to a will that avoids the cost and complication of rewriting an entire will. The codicil must be signed and witnessed and/or notarized in compliance with the state’s will formalities.
Most individuals who make bequests are deeply loyal to the mission of your nonprofit and want to make a long-term investment in your future. Because these gifts do not impact current assets or cash flow, they are frequently 10 times larger than the biggest lifetime gift. Most bequests are made to create an endowed fund or to add to your general endowment, thereby providing support for your nonprofit’s long-term future and continuing the donor’s philanthropy in perpetuity. Many donors set the amount of their gift to effectively endow their annual support.
As opposed to a living trust which is created during someone’s life, a testamentary trust is created in a will and goes into effect only upon the death of a decedent. The purpose of such a trust is to provide assets and income for someone after your death.
If your estate is subject to estate taxes, now is an important time to meet with your attorney, tax professional and other qualified professionals to update your plans.
Depending on which state you live in, your estate may also be subject to state estate taxes and/or inheritance taxes. It is also important to consider how you attempt to pass IRA or other similar retirement fund assets to your spouse or children, because those distributions will always be subject to income taxes. For many estates, careful planning is essential to minimize the impact of taxes on the estate. A qualified professional should be able to assist you with this. Finally, any assets you wish to pass on to qualified charities for their charitable purposes will avoid all taxation. In some cases, it’s a choice: give part of your estate to the government, or give it to charity. It is your choice if you do the proper planning.