A charitable bequest is a donation to charity that is included within your last will and testament. Although you can gift either property or cash, the gift will not be delivered to your selected charity until probate procedures have been completed. You have a variety of different options, some of which are described below.
Types of Bequests
The following types of charitable bequests are common in Florida:
In a specific bequest, you leave either a certain dollar amount or a specific item of property, such as your home, to a beneficiary charity. Since specific bequests, whether charitable or non-charitable, are the first type of bequest that is satisfied out of an estate, if the value of the estate might not be large enough to satisfy all bequests, a specific bequest offers the greatest degree of certainty that it will actually be distributed.
In a percentage bequest, you grant a certain percent of the value of your estate (15 percent, for example) to a charity. This is not a good way to distribute specific items of property, but it is a good way to maximize the value of your gift if you expect the value of your estate to increase between now and the time you die.
In a residual bequest, your gift only takes effect after all other estate gifts and expenses have been satisfied – in other words, it is a “whatever is left over, if anything” type of bequest.
In a contingent bequest, your beneficiary charity only receives the gift if a certain contingency occurs, as in “To Tom, but if he predeceases me, to the XYZ Muscular Dystrophy Foundation.”
A bequest made in your will, whether charitable or not, is subject to the delays of the probate process – weeks, months or in some cases even years. Certain costs will also be involved, which could reduce the value of the probate estate as a whole. There are ways to avoid probate (see below) and these ways are more popular than charitable bequests because of the probate inconvenience they avoid.
Non-Probate Charitable Gifts
Certain types of money and property can pass directly to your beneficiary charity without the need for probate, if you set it up properly using the right vehicles. Some of these vehicles include:
- Life insurance proceeds payable to a named beneficiary charity;
- Property held in a living trust (not a testamentary trust that is created under your will);
- Property held jointly with the charity with the right of survivorship vested in the charity (a bank account or a house, for example); and
- Property held in an IRA or qualified retirement plan with the charity named as the beneficiary.
Most people choose a trust as their vehicle for gifting money or property to a charity, and there are many different types of trusts that offer significant advantages.
Lorenzo Law Can Make It Happen
If you are considering making a charitable donation, you will need to understand all of your options before making a decision. Contact estate attorney Jose Lorenzo by calling (305) 999-5411, completing our online intake form, emailing us at [email protected] or visiting one of our offices in Coral Gables and Ft. Lauderdale. We handle cases throughout Florida.