Charitable Bequest in a Will: What It Is and How It Works

A charitable bequest is a instruction in your will that leaves something to a charitable organization. The gift can be a specific item or amount, a percentage of your estate, or whatever remains after other gifts are made. Because it is written into your will, you generally keep use and control of your assets during your lifetime.

Bequests are often described by type. A specific bequest names a particular asset or sum. A general bequest names an amount to be paid from the estate. A residuary bequest leaves all or part of what remains after other obligations and gifts. A contingent bequest only takes effect if something else happens, such as a named person not surviving you.

A bequest is different from naming a charity as a beneficiary on a retirement account or life insurance policy, which usually passes by form rather than by will. Both can support the same cause, but they work through different documents. How each is treated for tax and estate purposes can vary, so it is worth reviewing with a professional.

Traditionally, people have added a charitable bequest through their will or a later amendment, often called a codicil, drafted or reviewed by an estate planning attorney. Many choose this route because it is flexible: a will can generally be updated if circumstances, family needs or priorities change.

Many people name the charity using its exact legal name and, when available, its tax identification details, so there is less chance of confusion later. Some also describe how they hope the gift will be used, while understanding that a charity's acceptance of restrictions can vary and that unrestricted gifts are often easier for organizations to put to work.

Others coordinate bequests with the rest of their plan, including beneficiary designations, trusts and family gifts. Some people consider other vehicles, such as charitable trusts, alongside or instead of a bequest. Which approach fits depends on family circumstances, the kinds of assets involved, and how tax rules apply in a given year.

The right planner, such as an estate planning attorney working with your CPA and financial professionals, may help you clarify what you want your gift to accomplish and whether a bequest is a good fit. A first visit is often a conversation about your family, your assets, your values and any existing documents.

A planner may also help you spot practical issues, such as whether your will and beneficiary designations work together, how a gift of a percentage differs from a fixed amount, and what might happen if a named charity no longer exists. They may explain how a bequest could interact with taxes and with provisions for loved ones, without promising any particular result.

Questions you might ask: How should I word the gift and name the charity? Should it be a percentage or a fixed amount? How would this interact with my other documents and beneficiaries? How do current tax rules apply to my situation? How often should I review the plan? Always confirm current figures and suitability with your own CPA or estate planning attorney before acting.