Will and Trust Bequests
Have you decided how you want your assets distributed?
The Archdiocese has seen a significant increase in the number of bequests to it and Archdiocesan organizations over recent years. So much so that it has created a system for tracking such bequests to assure that the intentions of the thoughtful donors are appropriately acknowledged.
For many, charitable planning is simply making a bequest in a Will or revocable trust to take effect at the donor’s death. Bequests can take on a myriad of forms. A “testator” (maker of a Will) or a “settlor” or “grantor” (maker of a trust) is like a donor of a lifetime gift in that he or she can choose to make a bequest specific or residual, unrestricted or restricted.
Specific/Residual. Just like a lifetime gift, a bequest can be of cash or other property, real or personal. It can be specific, as in a specific amount of money (e.g., “I give and bequeath $10,000 to… ”), or specific property, like common stock in a publicly-traded corporation (e.g., “I give and bequeath all of my common stock in ABC Inc. to…”).
A bequest can also be unspecific and residual, referring to all or a stated fraction or percentage of the rest or residue of the donor’s estate, after obligations of the estate and specific bequests have been paid (e.g., “I give the rest, residue and remainder of my estate to…”).
Unrestricted/Restricted. Most bequests to the Archdiocese and its organizations are unrestricted, meaning that the donor intends for the organization to use the bequest in a manner it deems appropriate in carrying out its tax exempt mission; there are no constraints imposed on how the bequest may be used. Unrestricted bequests should contain language making it clear they are unrestricted (e.g., “…$10,000 to the Roman Catholic Archdiocese of St. Louis, for its exempt purposes, without restriction.”).
Occasionally, however, a donor will restrict the bequest to be used for a particular purpose or purposes. The language of a restricted bequest might provide, for example, for a sum of money to be paid “to Catholic Charities of St. Louis, to be used by said organization in providing food, clothing and shelter for the poor.” Before making a restricted bequest, the donor or his or her attorney should make certain that the desired restricted purpose is one that the charitable organization will be capable of carrying out. The Archdiocese will provide guidance on this issue as it pertains to restricted bequests to the Archdiocese and any of its organizations.
Bequests to Endowments. The Archdiocese and many of its organizations, parishes in particular, have created endowments, each of which carries out a particular purpose. Bequests can be made to these endowments in the form of a restricted bequest (e.g., “I give and bequeath $10,000 to the Roman Catholic Archdiocese of St. Louis for The Annual Catholic Appeal Perpetual Light Society Endowment Fund.”).
Provisional Bequests. Good estate planning attorneys will assist their clients in provisional planning. Such planning includes considering what should be done in the event a bequest fails because the person designated to receive it is not alive when the donor dies. To deal with such a contingency, a testator often will name a charity as the back-up recipient of the bequest (e.g. “I give and bequeath to my brother, John Doe, $10,000, but if he fails to survive me, then I give and bequeath such sum of money to the Roman Catholic Archdiocese of St. Louis, for its exempt purposes, without restriction.”).
Having a valid Will makes you feel confident that your intentions will be met. Besides passing your estate to your loved ones in the way you desire, you can remember your parish, school or favorite agency in your Will. There are three ways that you can remember a charity in your Will:
- A specific gift amount.
- A percentage of your estate.
- The remainder of your estate after you have taken care of your
heirs and loved ones.
Donors should consider fully each bequest they intend to make, and consult their attorneys about the manner in which the bequests should be structured to carry out their intentions. To receive suggested, model language for bequests to the Archdiocese or any of its parishes, agencies or high schools, or for assistance and materials to prepare for a meeting with an estate planning attorney, please contact the Office of Stewardship and the Annual Catholic Appeal at 314.792.7680.
IRS Circular 230: Charitable giving has tax implications. Please consult your personal tax advisors and please click here to review important tax disclosures.