A Bequest (gift through will) to Save Taxes
Thomas told his attorney that he wished to leave a bequest (a gift in his will) to Catholic Foundation of Eastern Montana 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 Foundation, designated for the Seminarian Education Endowment .
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 these taxes, very little would be left for my family. By giving the IRA to the Catholic Foundation of Eastern Montana, I could make a nice gift and avoid any additional tax for my estate and children.
Thomas contacted his IRA custodian to obtain a beneficiary designation form. He filled out the form and designated our organization as the 100% recipient of his IRA account. 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 gift for the Foundation in his will. He was pleased that because our organization was a tax-exempt institution, it would receive the full amount of the IRA value when he passed away, creating the kind of gift he hoped to benefit the Church and an increase in priests for our diocese.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 a color example of your benefits.
