Giving Through Your Will or Living Trust

In addition to filling an important role in providing for your family and others, your will or living trust can be a wonderful way to make charitable gifts a part of your long-range estate and financial plans. It can be gratifying indeed to know that a portion of your property will be put to good use after you no longer need it.

A gift made by will or living trust can be simple to arrange. A provision or amendment prepared by your attorney at the time you make or update your will or trust is all that is necessary. Gifts via wills and living trusts are popular because they are easy to arrange and may be changed at any time you choose.

Ways to give through wills and trusts:
  • Give only the remainder, or residue, of your estate—that is, what remains after all other bequests to friends and loved ones are satisfied.

  • Designate that a percentage of your estate be given through your will or living trust.

  • Leave a specific dollar amount. A gift of a particular amount may be designated for general use or for a special need of the charitable recipient.

  • Provide for a gift of a specific property. Real estate, stocks, and other items of value are examples of properties that can be used to fund charitable bequests.

  • Arrange a trust as part of your estate plan to provide income to a loved one, with an eventual charitable gift after that person's lifetime or another period of time you choose.

  • Name one or more charities to receive a contingent bequest in the event other heirs are not there to receive their legacies.

There is currently no limit on amounts deductible from federal gift and estate taxes for charitable gifts made by will or trust, so no tax will be due on assets given in this way. To plan a charitable bequest, inform your attorney of your wishes and ask for advice regarding the best form for your gift.

For example: Bob has been a generous donor to a number of charities over the years. When he revised his will 10 years ago, he decided to provide that some of his charitable interests would receive his estate should his daughter not survive him.

Today his daughter is financially independent. After careful consideration of his overall plans, especially the fact that he can now leave more to his daughter free of estate tax, Bob decides to revise his will to provide that the charities will receive generous gifts from his estate at the time of his death while his daughter will still inherit the majority of his assets. The amount left to charity will be fully deductible for estate tax purposes and could result in a significant reduction in estate taxes that might otherwise be due under current or revised tax law provisions.

Options using life insurance and retirement plans

Many people have life insurance or retirement plans with significant balances. In some cases, these assets total more than is needed for a comfortable retirement, and could give rise to heavy estate taxes.

In that case, it may be wise to consider using these funds to make charitable gifts now or in the future. A simple change of beneficiary form may be all that is required for gifts of what remains in your accounts. As in the case of gifts through wills and revocable living trusts, such gifts can be arranged to take place only if loved ones predecease you, or in the event of other circumstances you specify. For more information on retirement plan giving and special new incentives for those over 70½ to make gifts from these accounts, click HERE.

Your retirement plan benefits advisor or your life insurance professional can also provide more details upon request.