A bequest is a gift included in a Will that takes effect at death. You may make a bequest to nonprofit organizations like the Fisher Center by either executing a new will or amending an already existing will. As with other forms of charitable gifts, you may specify how your bequest will be used by the Fisher Center. The entire amount of a bequest to the Fisher Center qualifies for an estate tax charitable deduction.
Bequests to the Fisher Center may be specific, residual or contingent. A “specific bequest” refers to the donation of a specified amount of money or property to the Fisher Center. A “residual bequest” refers to the donation of all or part of the remainder of your estate after all other beneficiaries under your Will, debts and expenses have been paid. A “contingent bequest” refers to the donation of all or part of your estate to the Fisher Center only if one or more named beneficiaries predecease you.
Sample language for a “specific bequest”: “I give and bequeath the sum of $____ (or “____% of my estate”; or “the property described herein”) to the Fisher Center for Alzheimer’s Research Foundation, a 501(c)(3) not-for-profit corporation located in New York, NY.”
Sample language for a “residual bequest”: “I give, bequeath, and devise all [or "____% of] the rest, residue and remainder of my estate, both real and personal, wherever situated, which I may own or be entitled to at my death, to the Fisher Center for Alzheimer’s Research Foundation, a 501(c)(3) not-for-profit corporation located in New York, NY.”
Sample language for “contingent bequest”: “If any of the foregoing bequests shall lapse, then I give, bequeath and devise such lapsed bequests to the Fisher Center for Alzheimer’s Research Foundation, a 501(c)(3) not-for-profit corporation located in New York, NY.”
All of the foregoing sample provisions can also be incorporated into a “living trust” (also known as a revocable trust).
A charitable lead trust allows you to donate to nonprofit organizations, like the Fisher Center, for a certain number of years, while leaving the remaining assets to individuals designated by you. To create such a trust during your life, you must transfer assets (e.g., cash, stocks, real estate) to a trustee through a trust agreement. The trustee then invests your assets and makes payments to the nonprofit organization(s) of your choice for a specified number of years. When the term of the trust ends, the assets plus any appreciation in their value will pass to designated non-charitable beneficiaries.
There are two main types of charitable lead trusts available, depending on what type of payments you wish the nonprofits to receive. An “annuity trust” pays the nonprofit a fixed amount annually, while a “unitrust” pays the nonprofit a different amount, recalculated each year, based on a specified percentage of the fair market value of the assets in the trust.
Through the use of a charitable lead trust, you may reduce gift taxes incurred when transferring assets to non-charitable beneficiaries (e.g., children, grandchildren). A charitable lead trust can also be created at your death under your Will, allowing for a possible reduction in estate taxes.
Due to the technical requirements of charitable lead trusts, it is important to review the tax implications of such trusts with your tax advisor.
A charitable remainder trust allows you to gift an interest in property to non-charitable beneficiaries (e.g., children, grandchildren, yourself) for a certain number of years while leaving the remaining assets to nonprofit organizations, like the Fisher Center. To create such a trust during your life, you must transfer assets (e.g., cash, stocks, real estate) to a trustee through a trust agreement. Payments from the trust are made to you and/or other designated non-charitable beneficiaries for a specified number of years. When the term of the trust ends, the assets remaining pass to the nonprofit organization.
There are two main types of charitable remainder trusts available, depending on what type of payments are made to the non-charitable beneficiaries. An “annuity trust” pays the non-charitable beneficiaries a fixed amount annually, while a “unitrust” pays the non-charitable beneficiaries a different amount, recalculated each year, based on a specified percentage of the fair market value of the assets in the trust.
Through the use of a charitable remainder trust, you may receive significant tax benefits. For example, if appreciated assets are transferred to a charitable remainder trust, no capital gains taxes are paid on the assets’ appreciation in value at the time of the transfer, even if the trustee decides to immediately sell the assets. The establishment of a charitable remainder trust also entitles you to an income tax charitable deduction. A charitable remainder trust can be created at death under your Will, allowing a possible reduction in estate taxes.
Due to the technical requirement of charitable remainder trusts, it is important to review the tax implications of such trusts with your tax advisor.
If retirement plan accounts (e.g., 401k, IRA) are left at your death to anyone other than a surviving U.S. citizen spouse, such accounts are subject to both income and estate taxes (if left to a surviving U.S. citizen spouse then only income taxes are payable). You can also leave your accounts to a nonprofit organization, free of income and estate taxes. Ask your financial advisor or accountant for more information.
Why is life insurance important?
Life insurance can be an important asset for everyone, especially someone with Alzheimer’s disease. The long-term costs of health care and nursing care can quickly make a dent in a family’s savings and may lead to financial suffering. Life insurance can help protect your finances for your heirs after your passing, or it can be cashed in to pay for your medical and care expenses if you have a life-threatening illness, like Alzheimer’s.
Even if you are not at risk for Alzheimer’s, life insurance can cover the big expenses after you pass away, like a funeral or memorial, lawyer fees, estate taxes, etc. This means that your family will not need to pay for these services out of their own pockets. Make sure you keep your beneficiary designations up to date so the money goes to the people you select.
Where can I get life insurance?
In many cases, term life insurance is offered as an employee group benefit by your employer. When purchased as a group benefit, the cost is generally much lower and requires less medical information for enrollment than when it is purchased by an individual.
Life insurance can also be purchased from independent insurance companies. It is wise to work with a company you know well and trust, or to find an independent insurance broker that does not work for only one company and can give you a variety of quotes. Make sure you review and understand the summary of any plan you are thinking of purchasing.
How much does life insurance cost?
Depending upon your age and health status at the time of purchase, the cost of life insurance can vary widely. The amount of coverage you purchase will also factor into the price you pay, so make sure you compare policies before you settle on one.
How much life insurance do I need?
The amount of life insurance you will need depends on the amount of money your family will need after your death (for funeral expenses, lawyers fees, debts, mortgage balances, etc.) and how much money your spouse or heirs will need after your passing in order to maintain their standard of living. Also think about your existing resources, such as savings accounts, investment assets, real estate and other assets you already have. The amount of life insurance you need can get complicated, so you will definitely benefit from meeting with a qualified, independent insurance professional.
Can life insurance benefit me while I am still living?
If you are diagnosed with a serious health problem, such as Alzheimer’s, you should contact your life insurance company and ask about accelerated living benefits or “viatical settlements”. Essentially, you are selling your life insurance back to the company or to a third party broker for a percentage of the face value of the plan, but usually not the entire face value, and you are getting the benefits before your death. Each state has its own regulations regarding viatical settlements and death benefits, so make sure you contact your state insurance regulator before taking any settlement.
Settlement money can be used to pay your immediate expenses. Keep in mind that if you cash out your life insurance, the policy is gone and therefore will not be available to your heirs after your passing.
For more information: