SAMPLE LANGUAGE FOR CHARITABLE BEQUESTS
Shown below are general illustrations of how charitable gifts might be worded in a will or in the dispositive provisions of a living trust. Your attorney will be more specific with respect to wording that is most appropriate in your state and for your personal planning objectives.
General bequest: “I give to Bethany Theological Seminary, an Indiana not-for-profit corporation located at 615 National Road West, Richmond, Indiana, the sum of $ _____________ to be used for its general purposes.”
A specific item of property could be substituted for the dollar amount (hence, in will language, a “specific” bequest). To maximize tax savings in such instances, consider in kind gifts to charity of savings bonds or other tax-deferred funds that may produce “income in respect of decedent.”
Residual bequest: “I give to Bethany Theological Seminary, an Indiana not-for-profit corporation located at 615 National Road West, Richmond, Indiana, the rest, residue, and remainder of my estate to be used for its general purposes.”
The above sentence is drafted to give all property in the estate once debts have been paid and other specific gifts have been made. It presumes that general or specific gifts will have been made by the will or trust, which gifts must be satisfied in full before the residuary clause goes into effect. If you want to give only a portion of the residue, such percentage language could be inserted.
Percentage bequest: “I give to Bethany Theological Seminary, an Indiana not-for-profit corporation located at 615 National Road West, Richmond, Indiana, ________ percent of my estate, to be used for its general purposes.”
This percentage clause is built on the assumption that the entire estate is being divided on percentage grounds, as contrasted with the residual approach illustrated above. You will note similarities between some of these clauses, depending on the objectives sought by the drafter.
For other than general purposes: All of the above examples utilize language “to be used for its general purposes.” If you wish to restrict your bequest to a particular purpose or endowment, we urge you to contact us during your planning process to make sure that language is structured to best inform us of your wishes and intentions so we are able to programmatically carry out your intention.
Income in respect of a decedent: In drafting testamentary provisions of your will or living trust, you may want to consider the interplay between those testamentary provisions and your designation of assets that could pass outside the probate or trust process. Other than joint tenancy assets, the most notable example for most people is the retirement account. As suggested in a different context above, certain assets produce tax consequences for non-charitable beneficiaries – the income in respect of a decedent (IRD) issue. Designating IRD assets to charity and non-IRD assets to family may be a more tax-efficient solution than the other way around. Please contact us and/or check with your advisor if you have questions about this issue.
EIN: If needed by your advisors, our Bethany Seminary EIN is available on request.
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