Sample Language for Charitable Bequests
A will provides a solid foundation for all estate planning. For many, a will also provides the opportunity to proclaim a Christian faith and demonstrate to future generations the value of stewardship.
Several choices must be made when planning a testamentary charitable gift. These choices involve:
Amount of gift - specific or residual
Type of gift - direct or contingent
Beneficial use of gift - restricted or unrestricted
Each of these choices is outlined below with language that may be helpful to you as you determine the charitable gift you wish to make to further the mission of the church. The examples given are intended to illustrate the various types of charitable gifts you can make. You should consult an attorney to consider the application of this language to your individual circumstances as part of an overall estate plan.
Amount of Gift - Specific or Residual
Specific bequests are most common. You leave a specific amount, such as "I bequeath to (named church or mission), the amount of $10,000..." or a specific asset or perhaps a specific percentage of your estate, such as 5% to charity.
The other option is to give the residuary of your estate to charity. A residual bequest is the remaining portion of your estate after all other expenses, taxes, and bequests have been made, such as "....the rest, residue and remainder of my estate, both real and personal, I give, devise and bequeath to (named church or mission)..."
Type of Gift - Direct or Contingent
A direct charitable bequest will go directly to the charitable beneficiary. It is not dependent on another event to take place.
A contingent bequest is an alternate bequest. A contingent beneficiary is only entitled to the contingent bequest if one or more prior conditions are satisfied. A charitable organization may be named as the alternate or contingent beneficiary, such as "If John Doe predeceases me or disclaims any interest in (describe property), I give such property to First Presbyterian Church."
Beneficiary's Use - Restricted, Unrestricted or Endowment Fund
A restricted bequest provides a sum of money for a specific or designated project or program of the Church. The form of bequest usually should be made in the broadest terms possible consistent with your interest. This guards against the possibility of the purpose of your gift becoming obsolete. For example,"...to be used for the benefit of First Presbyterian Church as its Board of Trustees see fit."
An unrestricted bequest can be used wherever the need is greatest. This allows the church or charity to respond to changing needs as they arise and eliminates a possible problem when a gift is given to a program that no longer exists. For example,"...to be used for _____, or if such use, in the judgment of the Board of Trustees becomes or is unwise or impractical, then for such purpose as the Board shall determine."
An endowment fund, sometimes referred to as a memorial fund, can be named to honor you or a loved one. This type of fund invests the gift and provides income to the charitable beneficiary you have chosen in perpetuity. A bequest made to the Presbyterian Foundation to establish an endowment fund will support the work of the Church far into the future. An endowment fund can permit restricted or unrestricted use of the income by your chosen beneficiary. An example of a charitable bequest to establish an endowment fund,"...to the Presbyterian Foundation, Jeffersonville, Indiana, the sum of $___ to establish an endowment fund in memory of my parents to be known and designated as the John and Jane Doe Memorial Fund. The income may be used for..."
These examples are for illustrative purposes only. The Presbyterian Foundation does not render legal, tax or other professional advisory services. When considering charitable giving, the services of a tax, legal, or financial advisor should be obtained.