If you want part of your legacy to support a cause or community you care about, your estate plan can help make that happen. Learning how to include charity in your will gives you a practical way to put those intentions in writing with guidance from your attorney or advisor. One of the most common ways is through a charitable bequest.
What Is a Charitable Bequest?
A charitable bequest is a gift to a charity or other nonprofit organization that you include in your will or revocable trust. The gift takes effect after your lifetime, so you can continue using your money and property while you are living. You might leave a gift to a national organization, a local nonprofit, or a community foundation.
A bequest can also change as your plans do. If your family circumstances, finances, or charitable priorities change, you can generally update your will or revocable trust to revise or remove the gift. You do not need a large estate to leave a charitable bequest. You can use a specific dollar amount, a percentage of your estate, or another type of gift to support a cause that matters to you.
For estates that owe federal estate tax, a bequest to a qualifying charity may also reduce the taxable estate under federal rules. Whether that matters in your situation depends on the rest of your estate plan and the current tax rules.
Ways to Include a Charity in Your Will
You can include a charitable gift in your will in several ways, depending on what you want it to accomplish and how you want to structure it.
- A specific bequest leaves a set dollar amount or a particular asset.
- A percentage bequest leaves a percentage of your estate.
- A residual bequest leaves all or part of what remains after you pay other gifts and expenses.
- A contingent bequest takes effect only if another beneficiary cannot receive their gift.
Some assets are handled differently because they generally pass by beneficiary designation rather than through your will. If you want one of these assets to go to charity, you usually need to name the organization on the account or policy itself.
- Retirement accounts such as IRAs and 401(k)s can generally name a charity as a beneficiary. Pre-tax retirement assets may create taxable income for individual heirs when they receive distributions, which is one reason some donors discuss these accounts as part of their charitable planning.
- Life insurance policies may allow you to name a charity as a full or partial beneficiary.
- Investment accounts may allow you to name a transfer-on-death beneficiary, depending on the account and financial institution.
The best way to structure a legacy gift depends on the assets involved and how your estate plan is set up. The Foundation’s legacy giving options provide an overview of ways to support the greater Pottstown region through planned giving.
How to Add a Charitable Gift to Your Will
Including a charity in your estate plan usually involves a few straightforward steps.
- Decide what you want your gift to support. You might choose a specific nonprofit, a particular cause, or a fund designed to respond to the community’s changing needs over time.
- Gather the organization’s information. Ask for its full legal name, mailing address, and federal tax identification number so your documents clearly identify the intended recipient.
- Add the gift to your estate documents. Your attorney can include the bequest in a new will or update an existing estate plan.
- Review your beneficiary forms. If your plans include a retirement account, life insurance policy, or another asset with a beneficiary designation, update that form directly with the plan administrator or insurance company. Changing your will generally does not change these designations.
- Consider telling the charity about your plans. This gives the organization an opportunity to understand your intentions and make sure it has the information needed to carry them out.
If you already have a will, your attorney can advise you on the appropriate way to make a change. In some cases, that may involve a codicil, a formally executed document that amends part of an existing will without replacing the entire document.
You are not generally required to tell a charity that you have included it in your estate plan, but doing so can help avoid questions later. Pottstown Regional Community Foundation encourages donors who have included the Foundation in their plans to contact the Foundation so the team can better understand and honor their charitable intentions.
Leaving a Local Legacy in the Greater Pottstown Region
A legacy gift can be as specific or as flexible as you want. You may want to continue supporting one organization that has mattered to you for years, focus on an issue you care about, involve family members in future giving, or leave room for your gift to respond to needs that may look different years from now.
Pottstown Regional Community Foundation offers several fund options for those different goals:
- A donor-advised fund lets family members or other appointed advisors stay involved by recommending grants over time.
- A field-of-interest fund supports a cause or issue area you choose without limiting the gift to one organization.
- A designated fund provides ongoing support for a particular nonprofit.
- The General Support Fund gives the Foundation flexibility to respond to changing needs across the greater Pottstown region.
You can compare these options on the Foundation’s charitable fund types page.
One advantage of planning a gift through a community foundation is that, depending on how you fund is structured, your intentions can remain connected to the region even as organizations and community needs change. You can also explore additional Ways to Give through the Foundation.
Planning a Charitable Legacy
Including charity in your estate plan is one way to carry your values forward and make sure your giving reflects what matters to you. The key is to put those intentions into clear legal and financial documents so they can be carried out as you intended. That is why charitable planning works best when it is considered alongside the rest of your estate plan.
Pottstown Regional Community Foundation can work with donors and professional advisors who want to create a lasting local impact. If you are considering a legacy gift, the Foundation can help you explore ways to support the greater Pottstown region for years to come.
Frequently asked questions
What is a charitable bequest?
A charitable bequest is a gift to a nonprofit organization, such as a community foundation, that you include in your will or trust. The gift takes effect after your lifetime, so you can generally keep control of your assets while you are living.
How do I leave money to charity in my will?
To donate to charity through your will, name the organization using its full legal name and federal tax identification number, then choose the type of gift, such as a set amount or a share of your estate. An attorney can write the gift into a new will or add it to an existing one.
Do I need a lawyer?
Working with an attorney helps make sure your gift is written clearly, reaches the right organization, and fits the rest of your estate plan. Your attorney, accountant, or financial advisor can also explain how a charitable gift may affect your situation.
Invest in Your Community
At Pottstown Regional Community Foundation, we’re dedicated to improving quality of life across the greater Pottstown region. We help donors give in ways that really make a difference and award grants to local organizations. The Foundation also funds and leads programs that serve our community. Contact us today to learn how we can work together.
