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Charitable Gift and Estate Planning
Eight Ways to Make a Bequest and a Difference
Here are eight generally accepted ways to make a bequest in your will or revocable living trust.
1. Specific bequest. This is a gift of a specific item to a specific beneficiary. For example, "I give my golf clubs to my nephew, John." If that specific property has been disposed of before death, the bequest fails and no claim can be made to any other property.
2. General bequest. This is usually a gift of a stated sum of money. It will not fail, even if there is not sufficient cash to meet the bequest—even if other estate assets need to be sold. For example, "I give $50,000 to my daughter, Mary."
3. Contingent bequest.This is a bequest made on condition that a certain event must occur before distribution to the beneficiary. For example, "I give $50,000 to my son, Joe, provided he enrolls in college before age 21."
4. Residuary bequest. This is a gift of all the "rest, residue and remainder" of your estate after all other bequests, debts and taxes have been paid. For example, say your estate is worth $500,000, and you intend to give a child $50,000 by specific bequest and the residuary estate to your spouse. If the debts, taxes and expenses are $100,000, there would only be $350,000 left for the surviving spouse. Most people prefer to divide their estates according to percentages of the residue (rather than specifying dollar amounts), to ensure that your beneficiaries receive the proportions you desire.
The previous items can apply in the case of bequests to individual heirs or bequests to charitable organizations, such as Children's Hospital and Health System Foundation. The above types of bequests generally define the amount of the bequest.
The additional terms below are optional considerations (added to the above bequests) when the bequest is made to charity.
5. Unrestricted bequest. This is a gift for our general purposes, to be used at the discretion of our governing board. A gift like this—without conditions attached—is frequently the most useful, as it allows CHHSF to determine the wisest and most pressing need for the funds at the time of receipt.
6. Restricted bequest. This type of gift allows you to specify how the funds are to be used. It's best, however, to consult CHHSF when you make your will to be certain your intent can be fulfilled.
7. Honorary or memorial bequest. This is a gift given "in honor of" or "in memory of" someone.
8. Endowed bequest. This bequest allows you to restrict the principal of your gift, requiring us to hold the funds permanently and use only a small percentage or the income they generate. Creating an endowment in this manner means that your gift can continue giving indefinitely.
Please contact Kelly Sachse at 414-266-6121 888-543-7233, or via e-mail at ksachse@chw.org, for more information.
Copyright © The Stelter Company, All rights reserved.
The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to income tax apply to federal taxes only. Federal estate tax, state income/estate taxes or state law may impact your results.
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