A Bequest to Save Taxes
Thomas told his attorney that he wished to leave a bequest to us as part of his estate plan. Thomas's estate included some stocks, real estate and an IRA. Thomas's attorney recommended that he give the appreciated stock and real estate to his children and leave his IRA to the Community Foundation for Mississippi (CFM).
Thomas: My attorney told me that if I gave the stock and real estate to my children, these assets would receive a step up in basis at my death. My children could then sell them without paying tax. However, if I gave my children my IRA, the IRA would be subject to estate and income tax. After paying all of these taxes, very little would be left for my family. By giving the IRA to the Community Foundation for Mississippi, and designate it to benefit all the 501(c)3 nonprofits I love, I could make a nice gift, avoid any additional tax for my estate and children and support the charities I love – forever.
Thomas contacted his IRA custodian to obtain a beneficiary designation form. He filled out the form and designated the Community Foundation for Mississippi as the 100% recipient of his IRA account. He also filled out a non-binding Letter of Intent at CFM to communicate his charitable wishes. Thomas's attorney then specified in Thomas's will the bequest of his other assets to his children.
Thomas: I was so impressed with my attorney's advice that I named him executor of my will!
Thomas called and notified us of his bequest. He was pleased that because our organization is a tax-exempt institution, and would receive the full amount of the IRA value when he passed away, creating a legacy for the future, and supporting his favorite nonprofits. This bequest also automatically made him a member of the Mississippi Legacy Circle, which honors all who leave a planned gift.Is a bequest right for you?
It is easy and convenient to include a bequest in your will or living trust. This link includes sample bequest language that can very easily be included in your will.
You might find it helpful to print this page and the bequest language to give this information to your attorney. If you or your attorney have any questions, please contact us.
*Please note: The name and image above are representative of a typical donor and may or may not be an actual donor to our organization. Since your benefits may be different, you may want to click here to view an example of your benefits.