Making a Charitable Gift in Your Estate Plan

Making a gift to a charity in your estate plan is a wonderful way to give back. Today’s blog post will talk about the basics of charitable giving.

Choosing Charities

Before you leave money to any charity, it is wise to go to a website like and to make sure that the charity is worthy of your support. Unfortunately, there are many great sounding charities that spend most of their operating costs on administrative expenses or are scams.

How to Make the Gift

A gift to a charity can be made in a Will, a Trust or through a beneficiary designation on a financial account. If you already have a Will or Trust, a charitable bequest can be added by means of a codicil to a Will or an amendment to a trust.

Tax deferred accounts, like Traditional IRA’s, 401(k)’s, annuities can be a particularly great vehicle to benefit a charity for a few reasons. Neither you, your estate or the charity will need to pay income taxes on the asset. In addition, your estate will be able to claim the bequest as a tax deduction for income tax purposes. If you only want to give a portion of an account to a charity, you can leave a portion to loved ones and a portion to a charity. Hence, it isn’t all or nothing.

Prior to making any gift, it is important to know the correct name of the organization to ensure that the money goes to its intended beneficiary and to avoid confusion.

If the gift is made in a Will or Trust, it can be done in a number of different ways.

Specific Bequests: A specific bequest is a gift of a particular item. For example,” I give my diamond engagement ring to Charitable Organization.” If you dispose of your diamond ring before death, than this bequest becomes void.

General Bequest: A general bequest is a generally a gift of money. For example, “I give $5,000 to Charitable Organization.” If you do not have $5,000 at the time of your death, then other assets would be sold to fulfill this bequest.

Residuary Bequest: This a bequest of what is remaining in your estate after all other bequests and expenses have been paid. For example, “I give $1,000 to each of my children. The rest and residue of my estate shall go to Charitable Organization.”

Contingent Bequest: This is a bequest that is conditioned on another event occurring. “I give $5,000 to my friend, Ellen. However, should my friend, Ellen, not survive me, then $5,000 to Charitable Organization.”

Unrestricted Bequest: This is a bequest with no restrictions. “I give Charitable Organization $5,000 for its unrestricted use and purpose.”

Restricted Bequest: This is a bequest with restrictions. “I give Charitable Organization $5,000 for its children’s programs.” Such a gift may include safety language in the event that the specific purpose stated no longer exists giving the organization discretion to use the funds for another purpose.

For more information on incorporating Charitable Bequests into your estate plan, contact a Cleveland Estate Planning Lawyer.

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