The term "charitable bequest" is used to describe anything you give or leave to charity from your estate through a will or a revocable trust. An estate is any property, money or personal belongings that you may have at the time of your death. Most people leave an estate when they die, even though they may not have a great deal of wealth. Even an individual with a small estate can arrange to leave a charitable bequest.
Donors choose a bequest because:
- It is not payable until death, so it does not affect your assets or cash flow during your lifetime.
- It is revocable — you can change the provisions in your will or trust at any time.
- It is private — your will is not filed or made public until your death.
- Your giving options are increased.
A bequest can deliver a specific amount to AARP Foundation ("I bequeath the sum of Ten Thousand [$10,000] Dollars"). Alternately, it can deliver a percentage of the balance remaining in your estate after taxes, expenses and specific bequests have been paid — what's known as the residue ("I bequeath Ten [10%] Percent of the residue of my estate"). Some people use a bequest to give something they own, such as a car, home, art or jewelry. Others leave a paid life insurance policy or other financial investments, such as stocks, bonds or certificates of deposit (CDs). These gifts may provide tax savings.