What exactly are bequests to charities?
Bequests are the process by which a person transfers funds to a charity after death. It’s one of the most common ways for people to give back to their communities and causes that matter most to them. Read on for an overview of how endowments work, what they involve, and who might use one in their estate plans.
Bequests are gifts
Bequests to charities are gifts of cash, securities, or other items given through a will or trust. The amount of your gift is determined by you. You can also specify what form your bequest should take and when your loved ones should receive it.
Bequests allow you to make significant contributions to charities without reducing the size of your estate or leaving less for heirs to inherit. They are often used as part of an overall estate plan because they can provide significant tax benefits for donors who remain in good health but want to reduce their taxable estate at death by making charitable contributions now.
One-time gift – You can include specific instructions
A gift left in a will is a bequest. Gifts may be made in cash, securities or other items. You can also specify how much and when your loved ones should receive it.
In addition to specifying the amount of money you want to leave for charity, you can sign up for recurring monthly donations so that your loved ones don’t have to worry about remembering to make their donation every year.
Review your will regularly to ensure that your bequests are up to date
Having a plan in place is important. Review your will regularly to ensure that your bequests are up to date and reflect your wishes. If you need more information, speak with a professional such as an estate lawyer or tax advisor, who can help you create the best plan for yourself. For example:
- Have a copy of your important documents stored in one location (e.g., at home).
- Make sure you have sufficient life insurance coverage to protect your family and meet any tax obligations that may arise from the value of their inheritance after death (e.g., capital gains tax).
Make a bequest either as part of their estate planning or through their will
A bequest is a gift of cash, securities, or other items through a will or trust. You can include specific instructions on what form the bequest should take and when your loved ones should receive it. For instance, you might want to specify that an amount is to be set aside for an annual charity donation until your beneficiary reaches age 21; this would allow him or her to enjoy the benefits of receiving annual donations without tying up any assets for life.
In addition to setting aside funds for specific charities in your will, it’s also possible to leave a percentage of your estate’s value directly to a charitable organisation instead of naming specific amounts for each cause you wish to support. This strategy allows you greater flexibility over how much money goes where while still making sure certain causes get their fair share based on their needs and mission statements — although because this type of asset distribution can take longer before any cash reaches its intended recipients as compared with direct bequests during life via donations or through wills, many donors opt not to use this method at all because they want immediate impact rather than long-term sustainability.
Bequests to charities are a great way to leave something behind for the people and causes you care about. If you’re considering leaving a legacy of some sort, consider making a gift in your will as another way to give back.