A Bequest to Save Taxes
Dr. Thomas was a widower who lost his wife to MS. As a doctor who had directly benefited from our research funding, Dr. Thomas wanted to thank us with a gift from his estate.
Dr. Thomas told his attorney that he wished to leave a bequest to us as part of his estate plan. His estate included some stocks, real estate, and an IRA. Dr. Thomas's attorney recommended that he give the appreciated stock and real estate to his children and leave his IRA to the American Brain Foundation and the MS Society.
Dr. 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 charities, I could make nice gifts and avoid any additional tax for my estate and children.Dr. Thomas contacted his IRA custodian to obtain a beneficiary designation form. He filled out the form and designated the organizations as the recipients of his IRA account. Dr. Thomas's attorney then specified in Dr. Thomas's will the bequest of his other assets to his children.
Dr. Thomas: I was so impressed with my attorney's advice that I named him executor of my will!Dr. Thomas called and notified us of his bequest. 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 a legacy for the future.
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.