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Focus on . . . Bequests
A simple and flexible way to perpetuate your values is by including a gift to your favorite charities in your will. Such gifts, called bequests, may include property, securities, or cash, and are distributed at an estate’s settlement.
BENEFITS OF A BEQUEST
- It has no impact on your current assets.
- It is revocable.
- It may be fully deductible for estate tax purposes.
- But the greatest benefit of a bequest may be that it gives you the immediate personal satisfaction of knowing you will influence the lives of others.
THREE TYPES OF BEQUESTS
Specific bequest - You designate a specific property, dollar amount, or percentage of your estate to be transferred to a charity. For example, your will might include language such as:
“I give to the National Academies, a charitable institution located in Washington, DC, the sum of
$ _______ or ____% of my estate; or the property described herein] for its general purposes.”
Residual bequest - You designate a portion of your remaining estate to be transferred to a charity, after all other beneficiaries and expenses have been paid. For example:
“All the rest, residue, and remainder of my estate, both real and personal, I give to the National Academies, a charitable institution located in Washington, DC, to be used for . . .”
Contingent bequest - You designate a portion of your estate to be transferred to a charity only if a named beneficiary predeceases you. For example:
“If any of the foregoing bequests shall lapse, then I give to the National Academies, a charitable institution located in Washington, DC, such bequests as to which ineffective disposition was made.”
As with other charitable gifts, you can direct how your bequest is used. You may:
- make an endowed bequest, whereby the principle of your gift is held and only the earnings generated are distributed,
- target your gift to a specific cause or program,
- or make an unrestricted bequest, letting the beneficiary decide how to use your gift.
If you decide to make a bequest, share your plan with your attorney and financial advisors, who will draft appropriate language for your will and help structure the gift effectively. It is also wise to inform the charity that will benefit from your gift -- if only so they can recognize your generosity.
Check out other articles at Insight on Estate Planning and the Estate Planning News index. 
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