A bequest is a gift made through estate planning.
Estate planning encompasses a multitude of terms that can be confusing for many people.
Whether these are Latin terms, such as "per stirpes," or English words, like "bequest," unfamiliarity can lead to confusion as people navigate their estate planning goals.
I get that.
In this post, we will demystify what is meant by a bequest.
Simply put, a bequest is a gift made to loved ones or a cause through legal instructions in a last will and testament.
By understanding how bequests work and your various estate planning options, you can effectively protect your legacy and ensure your wishes are fulfilled.
A bequest is a gift made through a last will and testament.
Bequests can involve both tangible heirlooms and financial assets.
There are various options available in estate planning, including specific, general, contingent, and residuary bequests.
What are each of these?
A specific bequest involves the gifting of a particular item.
Often these are pieces of artwork, jewelry, or furniture.
A general bequest directs set sums or portions of the estate to a friend or family member.
Contingent bequests are disbursed if certain conditions have been met.
An example of this involves a portion of the estate going to a niece if her parents precede her in death.
Residuary bequests disburse the remaining sums of an estate after taxes, debts, and other gifts have been distributed.
An experienced estate planning attorney can help you navigate these options as you determine how to make your wishes a reality.
Although immediate family members are often the primary heirs of an estate, many people also choose to include gifts to religious organizations, schools, or nonprofit organizations.
Making a charitable bequest can have both legacy and tax benefits.
A comprehensive estate plan can allow you to leave charitable gifts while also providing for your loved ones.
If you desire to make charitable bequests, you can do so with securities, cash, real estate, or other assets.
You can provide specific directions for the use of the funds or leave the decision up to the organization.
The recipient of a bequest generally will not have their income tax impacted by the inheritance.
If an estate exceeds the federal or state exemption threshold, estate taxes may be owed by the estate before distribution of any gifts.
Having a detailed estate plan allows you to avoid legal disputes or confusion among loved ones.
When a charity is the recipient of a bequest, it is essential to use the organization's legal name and tax ID number to prevent funds from being misdirected or delayed in distribution.
Because life is not static, you will need to review and update your estate plan regularly, or after changes in your financial situation, marital status, or the number of children.
If you do not have an estate plan or need to review your current one, you can request a consultation with Harvest Law KC in Overland Park, Kansas.
Bequests are made through a last will to leave property or funds to organizations or individuals.
Whether you choose general, specific, contingent, or residuary bequests depends on your estate planning goals.
Leaving gifts to charities can help you reduce tax liability.
A lack of clarity in your estate planning can lead to confusion and conflict among heirs.
You should work with an experienced estate planning attorney to create a comprehensive estate plan and revise it as necessary.
This post is for informational purposes only and does not provide legal advice. You should consult an attorney for advice on any specific issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Fidelity Charitable "What Are Bequests?"
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