A Bequest to Save Taxes
Thomas told his attorney that he wished to leave a bequest to us as part of his estate plan. Thomas's estate included some stocks, real estate and an IRA. Thomas's attorney recommended that he give the appreciated stock and real estate to his children and leave his IRA to charity.
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 this organization, I could make a nice gift and avoid any additional tax for my estate and children.
Thomas contacted his IRA custodian to request a beneficiary designation form. He filled out the form and designated his local hospital as the 100 percent recipient of his IRA account. Thomas's attorney then specified in Thomas's will the bequest of his other assets to his children.
Thomas: I was so impressed with my attorney's advice that I named him executor of my will.
Thomas called and notified the hospital of his bequest. As a tax-exempt institution, the hospital 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 using our sample bequest language.
You may find it helpful to print this page and the bequest language page to review with your attorney, accountant or other advisor. If you or your advisor would like more information about bequests, please contact us. We would be happy to assist you. *Please note: The name and image above are representative of a typical donor, not an actual donor. Since your benefits may be different, you may want to click here to personalize an example of your benefits.
