Where There’s a Will… There’s a Bequest
When it comes to charitable giving, donors are faced with several decisions; and the larger the gift, the heavier those decisions. To illustrate my point I’ll create a fictitious donor – Edith Bunker, age 78, widowed with no children. Since her husband’s death three years ago, Edith has decided it is time to update her estate plan. She just received a market value report of her real estate and was surprised to learn how much her estate was worth. The value of her home and lake house totaled 1.2 million dollars and combined with her investments, her net worth was 2.6 million dollars.
Edith decided to give her two nieces $300,000 each, leaving a 2 million dollar balance of her estate that will go to various charities. Now comes the hard part – completing the philanthropy puzzle. First, Edith has to choose which charities will receive a bequest, and then how much. She decides that her United Methodist Church will receive 60% of her estate balance. The remaining 40% will be divided equally between the UMC Camp where she had served on the Board of Directors, and the college where she met her husband.
Edith’s one concern is whether or not she should place a restriction on the bequest to her church. She knows and loves the church, but realizes that without some direction a large gift could cause division. Her discernment left her with three options:
1. An unrestricted bequest
2. A restricted bequest that would provide income only
3. Restricting the bequest to income used for missions only
There are pros and cons to having strings attached to a large bequest and making this decision will be difficult for Edith.
To finish the philanthropy puzzle she has to decide whether to make an unrestricted bequest to the church or attach restrictions. Additionally, Edith has to choose which assets to give her nieces, and which ones to give to charity. There are also other issues concerning Edith, such as who will act on her behalf, both in terms of finance and healthcare, if she were to become incapacitated. Who would make sure her pledge to the church would continue?
To find out the rest of Edith’s story or how this story may apply to your current philanthropic situation, please attend our free Foundation Forum Educational Series webinar for June.