4 Types of Bequests and Estate Gifts

Planned Giving Explained

bequests and estate giftsWe receive a lot of questions about planned giving.  It is an element of fundraising that everyone knows they should be incorporating, but many organizations don’t know where to start. We would like to help. We are going to do a small series that will explain some of the intricacies, starting today with an explanation of bequests and estate gifts.

4 Types of Bequests and Estate Gifts

  1. Include a nonprofit in your will or living trust.  A simple way to support a nonprofit organization is by remembering them in a will.  It is quite easy to do.  If the person already has a living trust or will, simply ask an attorney to draft a codicil or amendment.  If they do not yet have a will or trust, they can contact a trusted attorney to help create this legal document. In general, bequests and estate gifts can be made as a:
    • Percentage bequest – make a gift of a percentage of your estate
    • Specific bequest – make a gift of a specific dollar amount or a specific asset
    • Residual bequest – make a gift from the balance or residue of your estate
    • Contingent Bequest – make a gift from your estate if the purpose of the primary bequest cannot be met.
  2. Provide support with your bank and brokerage accounts. A donor can provide a gift to a nonprofit directly from a bank account as part of an estate.  To do this, they should contact a broker or bank representative about making funds “payable upon death.”  It will require a “transfer on death” designation on an account so that the support will go directly to the organization.
  3. Name the nonprofit as a beneficiary of a retirement account. Designate the organization as a full, partial or contingent beneficiary of a retirement account (IRA, 401(k), 403(b) or pension). The beneficiaries of the retirement accounts will be taxed on any amount they receive. The nonprofit receives the full amount of the gift.
  4. Name the nonprofit as a beneficiary of a life insurance policy.
    Many people purchase life insurance to ensure financial stability should something happen. But as a family evolves, so do your needs for protection.  If a family situation has changed (e.g. your dependents have become independent), it may be worth it to consider including a nonprofit as a life insurance policy beneficiary. During the person’s lifetime, the ownership of this policy will not change.

Learn more about how Mersky, Jaffe & Associates can create a planned giving program for your nonprofit by clicking here

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