Testamentary Gifts

If you have assets that you need to retain total use of during the rest of your lives, but would like to see them used by a favorite charity after you pass on, consider a testamentary gift through your will, life insurance policy or retirement funds.

Will
A will is a document that lays out your plans for passing your real or personal property at death.

Everyone spends their life accumulating assets, but many are hesitant to spend four hours taking care of their family with a will.

The following general information about charitable gifts through estate planning will give you appropriate language and identify alternative forms of giving. Charitable gifts can be added to an existing will through a codicil or may be added when your will is reviewed and revised.

Four of the most popular forms testamentary gifts can take are:

Residual Gift: “All the residue of my estate, including real and personal property, I give to the Rocky Mountain Elk Foundation, Inc., located in Missoula, Montana.”

A Percentage of the Estate: “I give to the Rocky Mountain Elk Foundation, Inc., located in Missoula, Montana, ______ percent of my estate.”

A Fixed Amount of Money or a Designated Property: “I give to the Rocky Mountain Elk Foundation, Inc., located in Missoula, Montana, $_________, (or describe the real or personal property, including legal description or exact location).”

A Double Purpose Gift: You can provide a spouse or other individuals with income for life through a special gift to the Rocky Mountain Elk Foundation. You can do this by establishing a charitable trust through your will. Upon your death, the trust makes payments to the person you designate. After that person’s death, whatever remains in the trust passes to the Elk Foundation.

Life Insurance
Making a charity the owner or beneficiary of a life insurance policy is a good way to make a sizeable gift without an upfront transfer of cash or securities.

The donor can own a policy and make a charity the beneficiary. Proceeds payable to the charity at death of the policy-holder qualify for an estate tax deduction.

A charity can become the owner and be a beneficiary of a life insurance policy on the donor’s life. The donor gives the yearly premium to the charity so charity can pay the premiums. The advantage to the donor is that the premiums are deductible on his/her tax returns. This is a good way for a wage earning supporter of a favorite charity to make a substantial gift on the “installment” plan.

An existing life insurance with accumulated cash value can be used to fund a charitable remainder trust (CRT) and receive a charitable contribution (deduction) based on the principle amount.

Retirement Funds…401(k), 403(b), IRAs, mutual funds, etc.
To name a charity as the beneficiary of any of your retirement fund “left-overs," it also much simplifies you can name a charity in two ways without confusing the lives of other individual (non-charitable) beneficiaries:

Name the charity as the sole beneficiary of a separate account as mentioned above.

Name the charity as a co-beneficiary and require that the charity cash out its share before the end of the year following the death of the donor. By doing so, there will be no negative effect on the distribution period for others named as beneficiaries.

As a final note, it is important to watch each year as Congress reviews the rules pertaining to the use of retirement funds to benefit charity. In 2003, the Charity Aid, Recovery, and Empowerment Act (CARE ACT) would have allowed an IRA owner to gift IRAs during life to a charity or into a qualifying charitable gift plan, such as a charitable remainder trust, pooled income fund, or gift annuity. Unfortunately, the legislation did not pass the 2003 Congress. Such allowance would be a “win-win” for the IRA owners and charities.

The Trails Society is our recognition program for planned giving donors who remember the Elk Foundation. Recognition includes placing your name(s) on our recognition wall in the Missoula, Montana, Elk Country Visitor Center. If you desire to remain anonymous, we will certainly honor your wishes.