Plan Your Legacy Wills & Bequests
The simplest way to make a Planned Gift is by naming the Harry S. Truman Library Institute in your will. A bequest is a meaningful way to support the Institute without affecting your cash flow during your lifetime. Your attorney can include it when you prepare or revise your will or you can add a codicil at any time. A will is a simple legal document that spells out your wishes for distributing, the property and assets you have accumulated over your lifetime after your passing. People or organizations receiving bequests through your will are called beneficiaries.
A will can also state who will have guardianship of your children if they are still minors when you pass. A will names an executor or personal representative who is in charge of carrying out the terms of the will at your passing. This person can be a family member, friend, or even a bank or trust company officer who has experience acting in that capacity.
Each state has different laws governing wills. In most states, there is a specific court, called the probate court that handles all matters pertaining to wills. If you die without a will or other estate plan in place, it is known as dying intestate, and the probate court will also handle the distribution of your property. This is done according to rigid state guidelines that may not reflect your wishes.
The following are four types of bequests that are commonly used in wills.
As the name implies, specific bequests give a certain item, asset or amount of money to a beneficiary. This type of bequest should be used when you have very precise wishes about the disposition of funds or items.
Example: Mr. A. has been a supporter of the Institute for several years. In his will, Mr. A. has left a specific bequest of $10,000 to the organization to enable it to continue to offer its premier programs.
Percentage bequests are an excellent way to ensure that all the people and organizations you care about are remembered in your will. The value of your estate is constantly changing as assets gain or lose value or are used for other purposes (such as to pay medical expenses).
Example: Mrs. B. has a number of bank accounts, a stock portfolio, several pieces of real estate and a life insurance policy payable to her estate. The goal of her estate plan is to leave her assets equally to her four children as well as a bequest to the Truman Library Institute. Rather than trying to leave individual accounts or stocks to her children, her will directs her executor to liquidate (sell) all her assets, leaving a sum of money from which her four children and the Institute will each receive 20 percent. This percentage method ensures that each beneficiary will receive the proportionate share that Mrs. B. wishes them to have, regardless of fluctuations in the value of her assets. (If you use this method, make sure that your percentages total 100!)
You can make a residuary bequest, which gives all or a portion of the residue of your estate to the Truman Library Institute after payment of expenses and any specific amounts designated to other beneficiaries. Residual bequests are often used with specific bequests to make sure that all assets in the estate are disposed of according to your wishes.
Example: Mr. C. has four certificates of deposit that are nearly equal in value. His other assets include his home, a checking account and a car. His will directs that his four children will each receive one of the certificates of deposit and his sister will receive a $10,000 specific bequest. The Truman Library Institute will receive the residuary of his estate, that is, whatever is left after these specific bequests are fulfilled. The four children will receive the certificates of deposit and the executor will pay the sister’s bequest from the money received from the sale of the house, proceeds from the checking account and the sale of personal property. The residuary will then go to the Truman Library Institute.
As the name implies, a contingent bequest is one that may or may not be carried out, depending on the circumstances. Many people use this type of bequest when they have a desire to make a gift but also need to provide for family or dependents.
Example: Ms. D. financially supports her older brother, who is disabled and unable to work. She also wants to make sure that her niece has the funds to finance her college education or help her get started in her career. She would like to make a final gift to the Truman Library Institute as well. Her will stipulates that her niece will receive $10,000 if she has not yet reached the age of 25 at Ms. D’s death. The rest of her estate will go to her brother. However, if the niece is over the age of 25 or if her brother passes away before she does, their bequests will go to the Truman Library Institute.
NOTE: Because it is revocable, a bequest to charity provides no current income tax deduction. However, when a bequest is distributed, the amount will be deductible from your taxable estate.
Because your will is a binding legal instrument, you generally cannot change it without the assistance of an attorney. In many cases, changes to your will can be made by adding what is called a codicil (amendment). Because legal restrictions vary from state to state, it is necessary to work with a lawyer to add a codicil to an existing will.