How To Leave Your Inheritance to an Organization
Some people choose, upon their passing, to give their inheritance to a specific charity or organization. The great news is you don’t need a famous surname to give like a philanthropist.
If you would like to leave some or all of your money to a charity, here’s what you need to know about charitable giving as part of your estate plan.
Confirm That the Organization Accepts Donations
Before you make any other moves, you need to first find out if the organization can accept donations and confirm this with the charity of your choice. Bruce Tannahill, director of estate and business planning with MassMutual, said unless you have a formal agreement with the charity stating they will accept the inheritance, the confirmation is not a binding commitment.
Therefore, you should inquire with the organization if there is any form language they may request you put into your will or trust as part of a specific bequest. If the charity is not currently able to accept this kind of donation, Tannahill recommends exploring what they will accept or if other charities with a similar mission will accept it.
Determine How Much You Want the Charity To Receive
Will you give every penny of your estate, a certain dollar amount, or choose a specific percentage to donate to the charity? Decide how much you want the charity to receive and consider possible estate tax exemption, too.
“Some people want to leave the estate tax exemption — the maximum amount which can pass without tax — to individuals and the balance to charity,” said Tannahill. “Because the estate tax exemption is subject to change and the value of your assets will change, the amount the charity will receive will probably change from when the planning is done.”
Take Our Poll: What’s the Table Time Limit on a $400 Restaurant Meal?
Plan Ahead in Case the Charity Does Not Exist After Your Passing
Some businesses, including charitable organizations, do dissolve. If something happens and the charity you planned to donate to does not exist at the time of your death, what will you do next?
Estate planning attorney Andrew Ayers recommends taking the time to meet with your estate planning attorney and work out what happens to the bequest if the organization you’re donating to no longer exists. You may plan ahead to pass along the inheritance to another organization and make sure they receive the funds. Or, you may have the inheritance go back into the general distributions in your will.
Communicate How You Want Your Gift To Be Used
If there is a certain manner in which you would like the charity to use the inheritance, you can certainly inquire with the organization and learn more. Find out if the charity accepts this type of restriction, how long it may last, and what happens if the charity no longer uses it for this purpose.
Will You Receive Acknowledgment or Naming Rights?
Some individuals may also be interested in receiving recognition for their inheritance. This may include an acknowledgment or announcement about the donation or possible naming rights.
If you want to receive recognition for your gift, specifically naming rights, Tannahill recommends asking the following questions:
- What will the name be if you can receive naming rights?
- How long will the name be kept?
- What happens if your heirs don’t like something the charity is doing or not doing?
- What happens if the charity doesn’t like something you or your family did or is doing?
Work Alongside an Estate Planning Attorney
As you draft charitable planning provisions, make sure you do so alongside an estate planning attorney who is familiar with your needs.
Tannahill said the provisions in your will should be specific about your desires and provide enough flexibility to your personal representative, executor or trustee to adjust based on the conditions at the time of your death.
More From GOBankingRates