The benefits of making a legacy donation through a will or bequest include:
- You leave a lasting legacy to be remembered.
- You lessen the burden of taxes on your family.
- You may receive estate tax savings.
- This type of gift allows you to continue to use the property you will eventually leave to charity during your lifetime.
- Peace of mind that your gift is used how YOU want it used by designating your bequest to be used for a general purpose, for a specific purpose you choose, or to support one or more particular nonprofits.
- Flexibility to modify your bequest any time until your death, should your needs, situation, or interests change.
How do I make a bequest?
A bequest is one of the easiest gifts to make. With the help of an advisor, you can include language in your will or trust specifying a gift be made to family, friends or the Community Foundation for Northeast Michigan (CFNEM), as well as any of its affiliate foundations, as part of your estate plan.
What are my options?
A bequest can be made in several ways. You can choose to:
- Gift a specific dollar amount or asset;
- Gift a percentage of your estate;
- Gift from the balance or residue of your estate once other designations have been fulfilled;
- Make a beneficiary designation of specific assets such as insurance policies or retirement accounts.
Types of Bequests
Specific Bequest: This is a donation of a specific asset(s) such as real estate, a car, other property or a gift for a specific dollar amount. For example, you may wish to leave your home or $10,000 to the Community Foundation.
Percentage Bequest: The designation of a particular percentage of your overall estate to charity. For example, you may wish to leave 10% of your estate to the Community Foundation. (A bequest to the Community Foundation can ensure annual distributions to one or more nonprofits, for a particular field of interest, or for community needs that will change over the decades and centuries.)
Residual Bequest: This gift is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity. For example, you may wish to leave 30% of the residue of your estate to CFNEM.
Contingent Bequest: This is a donation made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave specific property, such as a vacation home, to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the vacation home will go to CFNEM.
How do I specifically name the Community Foundation in my will?
Here are some examples of suitable language for inclusion in a will or trust of a donor who wishes to leave a bequest to CFNEM, or any of its affiliate foundations (Iosco County Community Foundation, North Central Michigan Community Foundation, or Straits Area Community Foundation). It is always a good idea to speak with an attorney to ensure the language in your will is appropriate for the intentions you wish to be carried out. Language provided here is to assist you and your attorney with your will.
1. Specific Bequest (For an outright bequest to CFNEM or one of its affiliate foundations, we recommend the following language:
- Bequest of a Specific Dollar Amount
I hereby give, devise and bequeath _________ and No/100 dollars ($DOLLARS) to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, for CFNEM's general use and purpose.
- Bequest of Specific Personal Property
I hereby give, devise and bequeath DESCRIPTION OF PROPERTY to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, for CFNEM's general use and purpose.
- Bequest of Specific Real Estate
I hereby give, devise and bequeath all of the right, title and interest in and to the real estate located at ADDRESS OR DESCRIPTION OF PROPERTY to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, for CFNEM's general use and purpose.
2. Percentage Bequest
I hereby give, devise and bequeath ____ percent (___%) of my total estate, determined as of the date of my death, to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, for CFNEM's general use and purpose.
3. Residual Bequest
I hereby give, devise and bequeath to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, ALL OR A PERCENTAGE of the rest, residue and remainder of my estate to be used for CFNEM's general use and purpose.
4. Contingent Bequest
If (primary beneficiary) does not survive me, then I hereby give, devise and bequeath to CFNEM, a nonprofit organization located at 100 N Ripley St., Suite F, Alpena, MI 49707, Federal Tax ID #23-7384822, DESCRIPTION OF PROPERTY to be used for CFNEM's general use and purpose.
5. Restricted Bequests
If you are considering a bequest but would like to ensure that your bequest will be used for a specific purpose, please let us know. We would be happy to work with you and your attorney to help you identify ways to give and meet your charitable objectives. We will also work with you and your attorney to craft language to accomplish your goals.
Donors can choose to leave their donation unrestricted so the Community Foundation can use it for community needs as they evolve over generations. They can also choose to have their gift go to one or more of the Community Foundation’s specific fund already in existence, or to establish a new named fund (which can also be restricted or unrestricted).
Here is some sample language for a donor wanting to make a gift to a specific fund held at the Community Foundation:
The TRUSTEE shall pay to the CFNEM, a charity located in Alpena, Michigan, ten (10%) of the balance of the (augmented) RESIDUAL TRUST, free and clear of all trusts hereunder. This bequest shall be placed in the This bequest shall be placed in the Endowment Fund established October 1, 1999 for the BESSER MUSEUM OF NORTHEAST MICHIGAN, a charity located in Alpena, Michigan, to be used as provided in that established Endowment Fund.
If you are making a restricted bequest, we recommend that your attorney include the following provision to give CFNEM flexibility should it no longer be possible for our CFNEM to use your gift as you originally intended:
If, in the judgment of the Board of Directors of CFNEM, it shall become impossible for CFNEM to use this bequest to accomplish the specific purposes of this bequest, CFNEM may use the income and principal of this gift for such purpose or purposes as the Board determines is most closely related to the restricted purpose of my bequest.
6. Gifts of Retirement Assets
Donating part or all of your unused retirement assets, such as your IRA, 401(k), 403(b), pension or other tax-deferred plan, is an excellent way to make a gift to the Community Foundation. Benefits of this type of gift include:
- Avoiding potential estate tax on retirement assets;
- Allowing your heirs to avoid income tax on any retirement assets funded on a pre-tax basis;
- Receiving potential estate tax savings from an estate tax deduction.
How do I gift my retirement assets to the Community Foundation?
To leave your retirement assets to CFNEM or any of its affiliate foundations, you will need to complete a beneficiary designation form provided by your retirement plan custodian. If you designate CFNEM as beneficiary, we will benefit from the full value of your gift because your IRA assets will not be taxed at your death. Your estate will benefit from an estate tax charitable deduction for the gift.
More on gifts of retirement assets
60%-70% of your retirement assets may be taxed if you leave them to your heirs at your death. Another option is to leave your heirs assets that receive a step up in basis, such as real estate and stock, and give the retirement assets to CFNEM. As a charity, we are not taxed upon receiving an IRA or other retirement plan assets.
Please contact us if you have any questions about how to make a bequest to the Community Foundation, or to request any additional information that might be helpful to you and your attorney as you consider making a bequest to us.
If you have included a bequest for CFNEM in your estate plan, please let us know. We would like to thank you and recognize you for your gift, and making you a member of our Legacy Society.