Your will is a vitally important part of an effective estate plan. The following information provides answers to a number of commonly asked questions about making and revising wills.
Let's begin with the basics
A will that includes one or more charitable legatees is basically no different from other wills. The information it contains and the method in which it is executed must qualify under governing state laws.
Proper name: Just as several people in the same city may share the same name, many charitable institutions have same or very similar name. Check with the organization(s) or institution(s) involved and request its legal name.
The use of property: As in bequests to individuals, testators often choose to specify the use to which their bequests will be placed. Most charitable bequests are left to the charitable entity “for the general purposes of the organization in the discretion of its board.”
Limits on the size of the charitable bequests: Some states may impose limits on the amounts that can be left to charitable beneficiaries in certain situations. A spouse and/or child may be entitled to specific percentages of an estate, which may not be encroached upon by charitable dispositions. Such restrictions rarely impose barriers in the typical situations, but state laws should be examined if one or more charitable bequests that amount to a substantial portion of an estate are contemplated.
Choosing the form of the bequest
The fixed dollar bequest: In the case of a smaller bequest, it is usually best to simply state specific dollar amounts. This is particularly useful in the case of a highly liquid estate that will be reviewed on a regular basis.
The bequest of property: A donor may choose to leave a particular piece of real property, whether a home, farm, or rental property, to a charitable beneficiary. It may be left outright, or a life estate may be granted to a surviving spouse or other relative or friend.
Leaving a percentage: Many people choose to leave a set percentage of the residue of their estate for specified charitable uses.
Bequest of the residue: Perhaps the most common method of leaving charitable bequests in through residual clause. After providing for relatives and friends, many testators will specify that all or a portion of the residue of their estate be distributed to one or more charitable organizations or institutions.
Frequently Asked Questions about Bequests by Will
For another way to give, please see Charitable Gift Annuities.