How To Leave a Bequest To Charity

Not everyone wants to leave part of their estate to charity. But some do. And for those who do, there can be a right way and a wrong way to leave assets to charity. The following are two things to consider when leaving assets from your estate to charity.

(1) Designate the Right Organization. There a many charities out there. Some people want to leave part of their estate for cancer research, heart research, or to an organization that helps pets. But each of these causes has numerous organizations. And some of the larger organizations have local, state, and national organizations. Make sure you research your potential charitable bequest and leave it to the right organization.

(2) Restrict Your Bequest? Some people are not aware that they can restrict their charitable organization for a specific purpose. For example, a university alumni who studied engineering may want to restrict his bequest to the university to support scholarship for students pursuing an engineering degree. You do not have to leave your bequest to the general fund of the church, school, or other charitable organization. Know that you can restrict what your bequest will be used for, so long as it is in furtherance of the organization's charitable purpose.

Most serious discussions regarding leaving part of an estate to charity involves making tax-smart decisions. For example, someone with an IRA along with other assets may choose to name a charity as the beneficiary of the traditional IRA since income tax has not been paid on these funds, and if these funds are left to a charity, then no income will need to be paid on the distribution to charity. So some people leave their charitable bequests from their IRA or other pre-tax retirement account.

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.