Charitable Giving: Testamentary Gift

Many people would like to support charities but are unable to do so during their lifetime. Others support charities throughout their lives but wish to make final charitable donations through their wills. Fortunately, people have the option of giving to charities through testamentary gifts. While donating to charity through a will is noble, it must be done properly; otherwise, the testator’s wishes may not be carried out. As such, it is smart for anyone interested in making a gift to a charity through a will to seek legal counsel. If you wish to donate to a charity through your will, you should meet with a skilled estate planning attorney as soon as possible to discuss your options.

Making a Testamentary Gift to a Charity

Testamentary gifts are a popular way to give to charities. Such bequests not only allow people to support causes they care about but may also create tax benefits for the person’s estate. Specifically, gifts to charity qualify for an estate tax charitable deduction if they are part of the decedent’s gross estate and transferred via a will to a qualified charitable organization that will use the gift solely for charitable purposes. Generally, any corporation that is organized exclusively for charitable, scientific, religious, literary, or educational purposes is deemed a qualified charitable organization.

It is important that any testamentary gift to a charity is carefully drafted since imprecise language can jeopardize the gift. First, it is important that the charity is correctly identified by its legal name and address. If it is not, the gift may fail, and the estate will not be able to claim the deduction. It is also important to note that testamentary gifts to charities cannot be transferred through a third party.

In other words, if the testator leaves money or assets to a third party with the directive that they then donate the assets to a charity, the gift does not qualify for a charitable deduction. Similarly, if a bequest is made to an organization that solely uses it for charitable purposes, the estate cannot claim a charitable deduction unless the will clearly state that the gift should exclusively be used for such purposes. Testators can make gifts to unspecified charities, though, and such gifts will qualify for the charitable deduction. Typically they will state in their will that the gift should only be given to a qualified charitable organization.

It is also important the testator consider whether they would like to make a testamentary gift to a charity for a general or specific purpose. If they choose a specific purpose, they must ensure that the charity is capable of fulfilling the testator’s goal; otherwise the gift may fail.

Talk to an Estate Planning Attorney

There are many ways people can make charitable donations to organizations, including bequeathing gifts to an organization in a will. If you would like to donate to a charitable via a testamentary gift, please contact our office to learn more about your options.