A bequest is a gift made through a will. Everyone needs a will, whether married or single, with children or without. Anyone with assets should have a will in order to leave a legacy of support for the causes you are passionate about, and to insure that gifts to loved ones are made according to your specific intent.
If you die intestate (without a will), the state in which you reside - not you - will decide what happens to your estate.
A will can also reduce estate taxes for your heirs.
A will should always be executed in writing, signed and dated by you and by your witnesses.
There are other practical reasons for remembering your favored non-profits in your will right now. A bequest is a deferred gift which does not deplete your current assets. In addition, it can always be revoked. This is not the case with some other philanthropic arrangements.
Consult an attorney licensed in your state for further information.
How to Give Through a Bequest
The three most common options for giving through a bequest in a will are:
- Leaving a specific amount of money
- Leaving a specific asset like a home or other real estate, fine art or life insurance policies
- Leaving a residual percentage of your estate, after making other gifts to friends and family
Suggested Bequest Language
To leave a specific amount:
"I give to Americans United for Separation of Church and State of Washington, D.C., the sum of $_______________ for its general purposes."
To leave a specific asset:
"I give my (specify item) ___________________________ to Americans United for Separation of Church and State of Washington, D.C., for its general purposes."
To leave a residual amount:
"I give to Americans United for Separation of Church and State of Washington, D.C., __ percent of the residue and remainder of my estate, for its general purposes."
Please consult an attorney licensed in your state for further information.
Also, please contact Development Director Betsy Pursell by email or call (800) 875-3707 for more information about making a planned gift to Americans United.
Charitable Gift Annuities
A charitable gift annuity is a relatively simple and very common method of making a planned gift to a nonprofit organization. A gift annuity provides the financial advantage of income and tax benefits for donors as well as the satisfaction of making a needed gift to Americans United. They are especially popular in tough economic times because of the fixed return they provide regardless of market conditions.
A gift annuity is a simple contract that AU prepares by which you contribute assets of $10,000 or more, usually cash or stock, in exchange for a specific dollar amount of income for life in the form of a regular annuity payment. The payment to you is set at a fixed percentage based on your age and it will never decrease. Payments can be received immediately, or they can be deferred. An annuity can be for an individual donor, a donor and spouse, or a loved one.
In the year the annuity is arranged, you will be eligible for an income tax deduction. In addition, a portion of the payments you receive from Americans United will be income-tax free.
Good news: Charitable Gift Annuity payout rates have recently increased.
- Ann T. is 60 and her husband, Dan, is 65. They want to set up an annuity beginning this year when they both retire. With a $50,000 cash donation, they will receive an annual annuity of $2,400 based on a 4.8% return. (This rate is lower than that of a single annuitant.) When one of them passes on, the survivor will continue receiving the same annuity payment until he or she dies. They will also be eligible for a charitable income tax deduction of up to $10,344.
- David J. is 65 and wants to set up an annuity beginning this year. With a $50,000 cash donation, he will receive an annual annuity of $2,650 based on a 5.3% return. He will receive the annuity payment until he dies. He will also be eligible for a charitable income tax deduction of up to $16,562.
- Sandra W. is also 65 and will also fund an annuity with $50,000 in cash. However, she does not want to receive payments until she is 72. Therefore, her rate of return of 7.8% is higher than David’s. She will receive $3,900 per year. She will receive the annuity payment until she dies. She will also be eligible for a charitable income tax deduction of up to $23,570.
All of these annuitants will receive tax-favored payments for some period of years based on actuarial data.
This information is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are based on rates at the time these examples were created and are subject to change. References to estate and income tax include federal taxes only; individual state taxes may further impact results.
Please contact us for more detailed information on charitable gift annuities. We have several publications available. Keep in mind that there are many variables with gift annuities including age of annuitant, size of gift, etc.
Please use the information request form below to find out how this would work for you! Or contact AU's Development Director Betsy Pursell by email or calling (800) 875-3707.