May 8, 2013
While giving today is important, there are also ways you can make a difference later. We’re not talking about procrastination; we’re talking about giving through your estate plan. The most obvious and simple type of legacy giving is a bequest, which refers to money or property left to an organization through a will or estate plan. Interestingly in 2011, charitable bequests made up 8 percent of the $298 billion that was given to charity in the United States. That’s $24.4 billion. And for reference, South Carolina gave $2 billion to charity in 2012, ranking sixth overall in percent of income donated to charity. Indeed we are a charitable state. There are advantages to choosing to make a charitable bequest from a tax perspective. An outright gift from your estate is free from federal estate taxes, which means the nonprofit beneficiary receives the full amount. Whereas, if it’s left to an individual, a significant percentage might incur estate or income tax. So how do you make this happen? There are simple arrangements that need to be made in order to leave a portion of your estate to charity. Here are a few tips:
- I strongly encourage you to work with an attorney who is experienced in estate planning. Particular language needs to be used when establishing a bequest to ensure there are no issues in probate.
- Many of us are living longer and in some cases outlive beneficiaries designated in our wills/trusts. In this event, it’s best to have a provision in your will that will designate an organization as the recipient of the assets in your estate in the event your beneficiary(s) are no longer living
- Remember, you don’t have to be ‘wealthy’ to bequest funds or property to a nonprofit organization. There are numerous ways to manage your estate planning that will be beneficial to both your heirs and organizations that are meaningful to you. Your attorney can assist you with this.
- N.Y. State Could Get $40 Million From Man Who Died Without a Will, Forbes
- Nine Ways to Make Things Easier for Your Survivors, Huffington Post
About the Author Rita Caughman is a shareholder with the law firm of Ellis, Lawhorne & Sims, PA, and is a Certified Specialist in Estate Planning and Probate Law. Active in her profession and the community, Rita serves on the Community Foundation’s Board of Trustees.