Types of Legacy Gifts
Legacy gifts can be of any size and the gift might be made by a transfer during your lifetime or through planning arrangements that will take effect upon your passing. With legacy gifts, you will have a lasting and meaningful impact at the Carroll Center for the Blind, and depending on the type of gift or testamentary arrangement you choose, there may be tax savings and other advantages that will be of benefit to you or your beneficiaries. Using your retirement account for charitable giving at your death can be especially tax efficient when you are providing for both charities and individual family members or friends.
The most common vehicles for legacy gifts are: 1) a bequest in a will or revocable trust, and 2) a beneficiary designation in a retirement account, life insurance policy or investment or bank account. These legacy gifts take effect upon your death (or the death of a designated beneficiary) and no transfer of funds need be made during your lifetime, leaving you free to use and access your assets as you wish. In addition, such bequests are not irrevocable and can be modified in the future. Arrangements for these legacy gifts must be made during your lifetime by executing a will or trust or by executing and filing a beneficiary designation form. To assist you and your legal advisors, you will find suggested wording for these types of legacy gifts in the sample language for bequests and beneficiary designations section below.
There are many other types of legacy gifts, including:
- charitable gift annuity
- charitable pooled income fund
- charitable remainder unitrust and charitable remainder annuity trust
- charitable lead trust
- bargain sale
- insurance trust.
With some of these vehicles, you may transfer property in exchange for the annual payment to you (or a beneficiary) of income or a percentage of the property for a period of years or for the remainder of your lifetime.
Like most annual gifts to the Carroll Center for the Blind, usually legacy gifts are funded with cash, marketable securities, mutual funds or other liquid assets. Special arrangements will be needed for gifts involving the transfer of real estate, non-publicly traded securities, personal property, oil and gas properties, and other not-readily-marketable assets.
Sample language for bequests and beneficiary designations:
The following is suggested language that your attorney, accountant and financial advisor may find helpful for use in a will, revocable trust, or with a beneficiary designation for a retirement account, life insurance policy, or investment or bank account. The italicized wording in brackets is alternative language for the immediately preceding clause.
- Bequest of a sum in a will for general charitable purposes: “I give and bequeath the sum of ___________ dollars, without reduction for any tax occasioned by my death, to The Carroll Center for the Blind, 770 Centre Street, Newton, MA 02458, to be used and disposed of as the Carroll Center in its sole discretion deems appropriate [for its general purposes and support].” Note: Usually a bequest for general support or without other specification as to use may be applied to on-going operational expenses of The Carroll Center for the Blind, for its general endowment, and/or for another purpose or use, all as its Board of Directors determines.
- Bequest of a sum in a will to general endowment: “I give and bequeath the sum of ___________ dollars, without reduction for any tax occasioned by my death, to The Carroll Center for the Blind, 770 Centre Street, Newton, MA 02458, to be added to its unrestricted, general endowment.” Note: A gift to the endowment of the Carroll Center ensures that the funds will be held in perpetuity for the Carroll Center’s benefit.
- Bequest of a sum in a will to a specific purpose endowment fund: “I give and bequeath the sum of ___________ dollars, without reduction for any tax occasioned by my death, to The Carroll Center for the Blind, 770 Centre Street, Newton, MA 02458, to create [to be added to] an endowment fund to be used for the purposes of _______________, provided, however, if in the opinion of The Carroll Center for the Blind, it is ever not feasible for any reason to utilize such endowment fund for such purpose, the fund may be used for any other purpose or purposes which the Board of Directors of The Carroll Center determines in its discretion is most closely related to, or can most nearly accomplish, such intended restricted purpose.” Note: When planning to leave a bequest to establish an endowment fund for a specific purpose, it is best that the donor enters into an agreement with The Carroll Center ahead of time so that the specific terms and goals of the fund are clearly and fully delineated. With such a pre-existing agreement, the bequest in a will would reference that agreement.
- Beneficiary designation of a sum or percentage for general charitable purposes: “I hereby direct that all prior beneficiary designations for the above-described retirement account [life insurance policy, investment account, bank account] be removed and that the beneficiary designation for such retirement account [life insurance policy, investment account, bank account] be changed to the following: The sum of ___________ dollars [ten percent (10%) of the fair market value of such retirement account on the date of death of _______] to The Carroll Center for the Blind, 770 Centre Street, Newton, MA 02458, to be used and disposed of as the Carroll Center in its sole discretion determines [for its general purposes and support].”
The foregoing sample bequest and beneficiary designation language is for informational purposes only and may not be applicable in your situation; accordingly, these suggestions should not be considered professional tax, legal or accounting advice. For the tax, financial and dispositive effect of a particular planning concept and bequest language, you should consult a qualified professional advisor about your personal and financial circumstances and planning goals.
We look forward to talking with you about the different ways you can help the Carroll Center for the Blind through a legacy gift. To insure that your legacy gifts and non-liquid assets will pass to the Carroll Center without difficulty, or for further information regarding leaving a legacy gift, please contact Dara Dalmata, Chief Development and Communications Officer, Carroll Center for the Blind, at 617-969-6200 x259 or email@example.com.