Charitable Bequests
What is a Charitable Bequest?
A charitable bequest is a written statement in a will which directs that a gift be made to charity upon the death of the person who made the will (the testator).
Types of Bequests: Specific Bequests:A specific bequest bequeaths a certain dollar amount ($10,000) or certain other property (such as a home, art collection, etc.). This is the most popular form of charitable bequest. Indeed, gifts of specific properties to charity may be uniquely appropriate bequests both for tax and other reasons.
During estate administration, specific bequests are the first type of bequest satisfied. Thus, if the estate cannot support all of the bequests made in a will, recipients of specific bequests are more likely to inherit than other estate beneficiaries. However, there is also the chance the testator may dispose of the property during life, in which case the intended recipient is out of luck.
A specific bequest of a certain dollar amount does not grow if there is an increase in the value of the estate after the donor executes the will. In addition, some specific bequests may be problematic. For example, a bequest of shares of a stock not traded on a public exchange may require an appraisal to set its valuation upon the donor's death. Also, a specific gift of real estate may require site inspection, environmental reviews, and other vetting before the charity can accept such a gift. That is why contacting the charity about the proposed gift before executing a will is a good idea.
Percentage BequestA percentage bequest devises a set percentage, i.e., 5% of the value of the estate. A percentage bequest may be the best format for charitable bequest since it lets the charity benefit from any estate growth during the donor's lifetime.
Residual BequestA residual bequest bequeaths assets that remain in the estate after all other bequests as well as any tax or administrative costs have been satisfied.
Contingent BequestA contingent bequest devises property only when those named as primary beneficiaries predecease the testator or if the named beneficiaries waive or disclaim the bequest provision.
Types of Bequests: Specific Bequests:A specific bequest bequeaths a certain dollar amount ($10,000) or certain other property (such as a home, art collection, etc.). This is the most popular form of charitable bequest. Indeed, gifts of specific properties to charity may be uniquely appropriate bequests both for tax and other reasons.
During estate administration, specific bequests are the first type of bequest satisfied. Thus, if the estate cannot support all of the bequests made in a will, recipients of specific bequests are more likely to inherit than other estate beneficiaries. However, there is also the chance the testator may dispose of the property during life, in which case the intended recipient is out of luck.
A specific bequest of a certain dollar amount does not grow if there is an increase in the value of the estate after the donor executes the will. In addition, some specific bequests may be problematic. For example, a bequest of shares of a stock not traded on a public exchange may require an appraisal to set its valuation upon the donor's death. Also, a specific gift of real estate may require site inspection, environmental reviews, and other vetting before the charity can accept such a gift. That is why contacting the charity about the proposed gift before executing a will is a good idea.
Percentage BequestA percentage bequest devises a set percentage, i.e., 5% of the value of the estate. A percentage bequest may be the best format for charitable bequest since it lets the charity benefit from any estate growth during the donor's lifetime.
Residual BequestA residual bequest bequeaths assets that remain in the estate after all other bequests as well as any tax or administrative costs have been satisfied.
Contingent BequestA contingent bequest devises property only when those named as primary beneficiaries predecease the testator or if the named beneficiaries waive or disclaim the bequest provision.
Supporting Our Communities
Our Communities are non-partisan. We include all those who need Hope and provide the help to realize it.