One of the most wonderful parts of the Christmas season is the gathering around of family to celebrate Christ’s birth together. This Christmas as your hearts turn toward home, family, and, of course, our Savior, perhaps it is a good idea to look to the future and caring for your family and leaving a lasting legacy for the next generation. Here’s some information that I was given from AiG’s director of planned giving services to help you with your legacy planning.
One popular way that you can do this is through bequests. A bequest is a form of planned giving in which the donor may retain and use assets during their lifetime and then leave the bequest to their family and charity.
Many people choose to leave specific items (such as land, real estate, stocks, art, and so on) to non-profits. The non-profit can then either use or sell the items in order to further their mission. Another option is a specific bequest of an amount of cash. This allows you to know the exact amount that will be transferred from your estate to charity. However, one thing to consider if you choose to directly transfer cash assets in a bequest is that if your estate is much larger or much smaller than the present value, this bequest to charity may be a larger or smaller part of the estate than you intend. Some people choose to leave a percentage of their estate instead.
After all of the specific bequests have been made and your estate costs and taxes have been paid, the balance of the estate is called the residue. You probably will choose to distribute the residue on a percentage basis. Many people chose to distribute the residue on a percentage basis and many choose to leave part of it to their favorite non-profit. Sometimes this is a small percentage (such as 5% or 10%) or other times it is an equal share as that of family or other beneficiaries.
If your estate includes an IRA or 401(k), you might consider a beneficiary designation to charity. Now, most IRAs are an excellent asset because the plan is funded with pretax dollars and grows tax free. But you or your beneficiary pays income tax when they withdraw the funds. If you bequest an IRA to family members, it comes with a very substantial “you-owe-the-IRS” tax bill attached. Therefore, if you are planning to leave assets to charity, the transfer of an IRA may be a good plan as they are tax exempt and won’t have to pay a large income tax.
A bequest also enables you to select a specific purpose for your assets. Perhaps you have a heart for something specific that the ministry does—you can specify that the money is used for that purpose. However, it is also wise to also designate a general category for the use of the funds so that the board of directors can select the best and most effective use of the bequest.
Bequests to non-profits, after your family has been cared for, can be a great way to establish a lasting legacy that will make a difference for the kingdom of God. Making a bequest to Answers in Genesis can be one way of pouring into the next generation. Your gift will help us spread the message of biblical authority and the gospel to millions of people. You can learn more about bequests or more about planned giving at GenesisGift.org.
Thanks for stopping by and thanks for praying,
This item was written with the assistance of AiG’s research team.