How to Leave Money to Charity in Your Will: A Step-by-Step Guide

Leaving a gift to charity in your will—known as a charitable bequest—is one of the most powerful and enduring ways to support the causes you care about. It allows you to create a lasting legacy that reflects your values, often without impacting your current finances. Whether you're passionate about medical research, education, animal welfare, or community services, a charitable bequest ensures your generosity continues long after you're gone.

This comprehensive guide will walk you through every step of the process, from understanding the different types of bequests to crafting the precise legal wording. We'll demystify the legal and financial aspects, provide clear examples, and share expert insights to help you make informed, confident decisions. By the end, you'll have a clear roadmap for incorporating charitable giving into your estate plan, ensuring your final wishes are honored and your philanthropic goals are achieved.

Understanding Charitable Bequests: The Basics

A charitable bequest is a provision in your will or trust that designates a portion of your estate to be transferred to one or more qualified charitable organizations upon your death. It's a straightforward way to support nonprofits without writing a check today. Bequests are revocable, meaning you can change or update them as your circumstances or charitable interests evolve.

Charitable bequests offer several benefits beyond the profound satisfaction of supporting meaningful work. From a financial perspective, they can reduce the taxable value of your estate, potentially lowering estate taxes for your heirs. According to the National Association of Charitable Gift Planners, bequests account for approximately 9% of all charitable giving in the United States, totaling billions of dollars annually that fund critical programs and services.

It's important to distinguish between different types of bequests, as each serves a different purpose and has different implications for your estate and the charity. We'll explore the specific types in detail in the next section. For a broader look at estate planning fundamentals, check out our guide on estate planning basics.

Types of Charitable Bequests: Choosing What's Right for You

Not all charitable bequests are created equal. The type you choose depends on your financial situation, your goals for your heirs, and how you want to support the charity. Here are the four main types:

Specific Bequest: This involves leaving a specific asset or a fixed dollar amount to a charity. For example: "I give $10,000 to the American Red Cross." It's clear and straightforward, but if the specified asset is no longer in your estate at death, the bequest may fail unless your will includes alternative provisions.

Percentage Bequest: You designate a percentage of your estate's total value to go to charity. For instance: "I give 10% of the residue of my estate to the Nature Conservancy." This approach automatically adjusts with the size of your estate, protecting against inflation and changes in your net worth.

Residuary Bequest: The charity receives all or a portion of what remains of your estate after specific bequests, debts, taxes, and administrative expenses are paid. This is often the most significant type of bequest, as it deals with the "leftover" assets. Example: "I give the rest, residue, and remainder of my estate to the local food bank."

Contingent Bequest: The gift to charity only takes effect if certain conditions are met, typically if your primary beneficiaries (like family members) do not survive you. This ensures your assets go to charity rather than to distant relatives or the state if your direct heirs are not alive.

The table below summarizes the key characteristics of each type to help you compare:

Choosing the right type often requires balancing certainty for the charity with flexibility for your estate. Many people use a combination, such as a specific bequest to a favorite museum and a percentage bequest to a university. For more on tailoring your estate plan, see our article on customizing your will.

The Legal and Financial Benefits of Charitable Bequests

Beyond the altruistic motivation, leaving money to charity in your will can provide tangible legal and financial advantages for your estate and your heirs.

Estate Tax Reduction: In the United States, the federal estate tax applies to estates exceeding a certain exemption amount (over $13 million per individual as of 2024). Charitable bequests are generally deductible from the value of your taxable estate. This means that by leaving a portion to charity, you can potentially reduce or even eliminate the estate tax burden, leaving more for your heirs. For example, if your taxable estate is $15 million and you leave $2 million to charity, only $13 million may be subject to tax, potentially saving hundreds of thousands in taxes.

Income Tax Benefits for Your Estate: While you don't get an income tax deduction during your lifetime for a bequest (since it's fulfilled after death), your estate may receive an estate tax deduction, as noted above. In some cases, if your estate earns income during the administration period, charitable deductions might also apply at the estate level.

Fulfilling Philanthropic Goals Efficiently: A bequest allows you to make a significant gift that might not be feasible during your lifetime. You can leverage assets that have appreciated in value, like stocks or real estate, and the charity typically receives the full value without capital gains tax implications that might arise if you sold the asset yourself.

Providing for Family and Charity: A well-structured estate plan ensures your family is cared for first, with charitable gifts coming from the remainder. This prioritization provides peace of mind that your loved ones are secure while still enabling meaningful philanthropy.

It's crucial to consult with a financial advisor or estate planning attorney to understand how these benefits apply to your specific situation, especially given changing tax laws. For an overview of tax considerations, explore our resource on estate planning and taxes.

Step-by-Step Guide to Including a Charity in Your Will

Now, let's walk through the practical steps of making a charitable bequest. Following this process will help ensure your wishes are clearly documented and legally sound.

Step 1: Decide on Your Charitable Goals Start by reflecting on the causes that matter most to you. Do you want to support a local community organization, a national health charity, your alma mater, or a religious institution? Make a list of potential beneficiaries. Consider the impact you want to have and whether you prefer unrestricted gifts (for the charity to use as needed) or restricted gifts (for a specific program or project).

Step 2: Choose the Type and Amount of Your Bequest Refer to the types of bequests discussed earlier. Determine whether a specific, percentage, residuary, or contingent bequest aligns with your estate size and family obligations. A common approach is to leave a percentage of your residuary estate, which automatically adjusts and doesn't require updating with inflation.

Step 3: Identify the Charity Correctly This is critical. Use the charity's full legal name and, if possible, its Employer Identification Number (EIN) and address. For example, not just "American Cancer Society," but "American Cancer Society, Inc., EIN 13-1788491, 250 Williams Street NW, Atlanta, GA 30303." This avoids confusion if multiple organizations have similar names. You can usually find this information on the charity's website under "Legacy Giving" or "Planned Giving," or by asking them directly.

Step 4: Draft the Legal Language Work with an estate planning attorney to incorporate the bequest into your will or trust. While online tools can provide a foundation, professional legal advice is essential to ensure the language is precise and complies with state laws. We'll provide sample wording in the next section.

Step 5: Review and Update Your Plan Regularly Life changes—marriages, births, divorces, fluctuations in net worth, or shifts in charitable interests. Review your will every 3-5 years or after any major life event to ensure your bequests still reflect your wishes. Charities may also merge or change names, so updates might be necessary.

Step 6: Inform Your Executor and the Charity While not legally required, it's helpful to inform your chosen executor about your charitable intentions so they can carry them out smoothly. You might also consider notifying the charity; many have legacy societies to honor future donors and can provide assurance they are correctly identified.

Following these steps methodically will create a robust, effective charitable bequest. For a deeper dive into the will creation process, use our free will-making tool.

Crafting the Correct Legal Wording: Examples and Templates

The precise wording of your charitable bequest is paramount to avoid ambiguity and legal challenges. Here are examples for each type of bequest, which can be adapted with your attorney's guidance.

Specific Bequest Wording:

"I give and bequeath the sum of [Amount in Dollars] ($[Numeric Amount]) to [Full Legal Name of Charity], EIN [EIN Number], currently located at [Address], for its general charitable purposes."

Percentage Bequest Wording:

"I give, devise, and bequeath [Percentage] percent (%) of the rest, residue, and remainder of my estate to [Full Legal Name of Charity], EIN [EIN Number], currently located at [Address], to be used for its general purposes."

Residuary Bequest Wording:

"After the payment of all my just debts, expenses, and specific bequests, I give, devise, and bequeath all (or a stated fraction, e.g., one-half) of the rest, residue, and remainder of my estate, both real and personal, to [Full Legal Name of Charity], EIN [EIN Number], currently located at [Address], for its general charitable purposes."

Contingent Bequest Wording:

"If [Primary Beneficiary Name] does not survive me, then I give, devise, and bequeath [describe gift, e.g., the sum of $X or X% of my residuary estate] to [Full Legal Name of Charity], EIN [EIN Number], currently located at [Address], for its general purposes."

Important Considerations:

• Unrestricted vs. Restricted: "For its general charitable purposes" gives the charity flexibility. If you want to restrict the gift (e.g., "for the scholarship fund"), specify clearly, but be aware overly restrictive terms might become impractical over time. Discuss restrictions with the charity first.
• Multiple Charities: You can name several charities and specify the share for each (e.g., "in equal shares" or listing specific percentages).
• Alternate Provisions: Consider adding language like "or its successor organization" in case the charity merges or changes name, and naming an alternate charity if your first choice ceases to exist.

Always have an attorney review the final language to ensure it integrates properly with the rest of your will and adheres to state-specific legal requirements. For more on legal precision, read our article on avoiding will disputes.

Common Mistakes to Avoid When Leaving Money to Charity

Even with the best intentions, errors in planning can undermine your charitable goals. Here are key pitfalls to steer clear of:

1. Using Incorrect or Incomplete Charity Information: As emphasized, failing to use the legal name and EIN can lead to confusion, delays, or the gift failing entirely if the executor cannot identify the correct beneficiary.

2. Overly Restrictive Gift Terms: While designating funds for a specific program is admirable, conditions that are too narrow (e.g., "to build a new wing named after me") might become impossible if needs change. Charities may be unable to accept such gifts. Opt for broader language or discuss terms with the charity to ensure they are feasible.

3. Not Updating Your Will: An outdated will might reference a charity that has merged, changed its name, or no longer exists. It might also not reflect your current financial situation or family structure, leading to unintended distributions.

4. Forgetting About Taxes and Debts: Bequests are fulfilled after estate debts, taxes, and administrative costs are paid. If your estate is smaller than anticipated, a specific bequest might consume a larger portion than intended, potentially reducing what's left for other heirs or charities.

5. Neglecting to Inform Key Parties: If your executor is unaware of your charitable intentions, they might overlook them or face challenges during administration. Similarly, not informing family members can lead to surprises and potential conflicts after your passing.

6. DIY Errors Without Legal Review: Online templates are a starting point, but they may not address complex family situations, state-specific laws, or tax implications. A mistake in wording can render a bequest invalid or create legal ambiguities costly to resolve.

By being aware of these common errors, you can take proactive steps to avoid them, ensuring your charitable legacy is realized as you envision. For guidance on comprehensive estate planning, see our piece on common estate planning mistakes.

How to Choose the Right Charity for Your Bequest

Selecting which charity or charities to support is a personal decision, but it's wise to make it an informed one. Here's a framework to evaluate potential beneficiaries:

1. Align with Your Values: Identify causes you are passionate about. Reflect on personal experiences, community needs, or global issues you want to address. Your bequest is a lasting reflection of what matters to you.

2. Research the Charity's Effectiveness: Look beyond the mission statement. Use tools like Charity Navigator, GuideStar, or the BBB Wise Giving Alliance to assess financial health, transparency, and accountability. Key metrics include the percentage of expenses going to programs (ideally over 75%), reasonable administrative costs, and clear reporting.

3. Consider Longevity and Stability: Since your gift will be realized in the future, choose organizations with a track record of stability and sound management. A charity with a strong endowment and diversified funding is more likely to be around to use your gift effectively.

4. Evaluate Impact: Review the charity's annual reports and outcomes. How do they measure success? Do they have specific programs that resonate with you? Some donors prefer supporting local charities where they can see direct community impact, while others choose large national organizations for broader reach.

5. Engage with the Charity: Reach out to their planned giving department. Discuss your intentions; a reputable charity will be transparent, provide necessary legal details, and explain how bequests are used. This also confirms they have a mechanism to handle legacy gifts.

6. Diversify if Desired: You don't have to choose just one. Many people split their charitable bequest among several organizations to support multiple causes or balance local and national interests.

Mini-Case: Sarah's Decision Sarah, a retired teacher, wanted to leave a bequest to support education. She considered her alma mater but also loved a local after-school program. She researched both: the university had a strong endowment and a clear scholarship fund, while the local program showed high impact with at-risk youth but less financial transparency. She contacted both; the university sent detailed information, while the local program's director personally explained their needs. Sarah decided to leave 70% to the university's scholarship fund (for stability) and 30% to the local program (for direct community impact), ensuring her gift addressed both broad and immediate educational needs.

Choosing thoughtfully ensures your gift creates the maximum positive effect. For more on evaluating charities, visit our partner resources at nonprofit insights.

Communicating Your Wishes to Family and Executors

Transparent communication about your charitable intentions can prevent misunderstandings and honor your legacy smoothly.

Why It's Important: Family members may be surprised by charitable bequests, especially if they affect their inheritance. Open discussion helps them understand your values, reduces the potential for conflict or legal challenges after your death, and allows your executor to administer your estate efficiently.

How to Have the Conversation:

• Choose the Right Time: Bring it up during a calm, private moment, not in the midst of other family tensions.
• Explain Your Motivations: Share why charity is important to you and how you hope your gift will make a difference. Frame it as an extension of your life's values, not a reduction of what you're leaving to family.
• Be Clear About the Details: Explain which charities you've chosen, the type and size of the bequest, and how it fits within the overall estate plan. Assure heirs that their needs were considered first.
• Provide Context: If you're leaving a percentage rather than a fixed amount, explain that the actual value will depend on the estate's size at death.
• Listen to Concerns: Be open to questions. Some heirs might worry about their own financial security; reassure them by explaining the planning behind your decisions.

Informing Your Executor: Provide your executor with a copy of your will and a letter of instruction that includes contact information for the charities, any relevant documents, and an explanation of your wishes. This equips them to fulfill their role effectively.

Documenting Beyond the Will: Consider writing a legacy letter—a personal, non-legal document that explains your charitable choices and the values behind them. This can be a cherished keepsake for both family and the charity.

Effective communication turns your bequest from a transactional directive into a meaningful part of your family story. For tips on family discussions, see talking about estate planning.

Tax Implications and Considerations

While the primary motivation for charitable bequests is philanthropic, understanding the tax implications can help you structure your gift to maximize benefits for both the charity and your heirs.

Federal Estate Tax Deduction: As noted, bequests to qualified public charities are generally deductible from your gross estate, reducing the value subject to federal estate tax. There is no limit on the deduction amount. For large estates, this can result in significant tax savings.

State Estate or Inheritance Taxes: Some states have their own estate or inheritance taxes with lower exemption thresholds than the federal level. Charitable bequests may also be deductible for state tax purposes, but rules vary by state. Consult with a tax professional familiar with your state's laws.

Income in Respect of a Decedent (IRD): Certain assets, like retirement accounts (IRAs, 401(k)s) or annuities, contain "IRD"—income that was earned but not taxed during your lifetime. If left to individuals, these assets are subject to both estate tax and income tax. Naming a charity as the beneficiary of an IRA, for example, can be highly tax-efficient: the charity receives the full amount tax-free, and your estate gets an estate tax deduction, effectively bypassing both layers of tax.

Example of Tax-Efficient Giving: Suppose you have a $1 million IRA and a $2 million taxable investment account. You want to leave $1 million to your children and $1 million to charity. If you leave the IRA to your children, they will pay income tax on withdrawals, reducing the net amount. If you leave the IRA to charity and the taxable account to your children, the charity gets the full $1 million tax-free, and your children inherit the $2 million account with a stepped-up cost basis (minimizing their capital gains tax). Your estate also gets a $1 million charitable deduction.

Charitable Remainder Trusts (CRTs): For larger estates, more complex vehicles like CRTs allow you to provide income to heirs for a period, with the remainder going to charity, offering both income and estate tax benefits. These require professional setup.

Always work with an estate planning attorney and tax advisor to navigate these considerations based on your specific assets and goals. For an overview of tax strategies, explore tax-smart giving.

Updating and Reviewing Your Charitable Bequests

Your estate plan is not a "set it and forget it" document. Regular reviews ensure it remains aligned with your current wishes, financial situation, and the legal landscape.

When to Review:

• Every 3-5 Years: Even without major life changes, periodic reviews catch drift in your goals or net worth.
• After Major Life Events: Marriage, divorce, birth or adoption of a child/grandchild, death of a beneficiary or named charity.
• Significant Financial Changes: Large inheritance, sale of a business, substantial increase or decrease in assets.
• Changes in Charitable Interests: New passions emerge, or a charity you supported changes its mission or ceases operations.
• Tax Law Revisions: Estate tax exemptions and rules can change with new legislation.

What to Check During a Review:

1. Charity Information: Are the legal names and addresses still accurate? Has the charity merged?
2. Bequest Type and Amount: Does a specific dollar amount still make sense, or should you switch to a percentage? Is the percentage still appropriate given your estate's current size?
3. Family Circumstances: Do changes in your family structure necessitate adjustments to ensure fairness and support?
4. Overall Estate Plan: Does the charitable bequest integrate well with other elements like trusts, beneficiary designations, and powers of attorney?

How to Make Changes:

• Codicil: For minor changes, a codicil (an amendment to your will) can be used. It must be executed with the same formalities as the original will.
• New Will: For substantial changes, revoking the old will and creating a new one is often cleaner and avoids confusion.
• Beneficiary Designations: For assets like retirement accounts or life insurance, update the beneficiary forms directly with the financial institution, as these override your will.

Keeping your plan current ensures your charitable intentions are realized as intended and minimizes administrative hurdles for your executor. Use our free estate plan review checklist to stay organized.

Working with Nonprofits and Professional Advisors

Collaborating with nonprofits and leveraging professional expertise can enhance the impact and ease of your charitable bequest.

Engaging with Nonprofits: Most established charities have a planned giving or legacy giving department. Their role is to assist potential donors like you. Reach out to discuss:

• Legal Details: Confirm their exact legal name, EIN, and address.
• Gift Options: Learn about specific funds or programs you can support.
• Recognition: Ask about legacy societies or recognition programs for bequest donors.
• Sample Language: They often provide sample bequest wording tailored to their organization.
• Impact Reports: Understand how past bequests have been used.

Building a relationship with the charity can provide confidence that your gift will be used effectively. Many of our nonprofit partners offer such support; learn more about partnering with nonprofits.

Working with Professional Advisors:

• Estate Planning Attorney: Essential for drafting legally sound documents that reflect your wishes and comply with state laws. They can also advise on complex strategies like trusts.
• Financial Advisor: Helps assess the impact of charitable gifts on your overall financial plan, portfolio, and heirs' security.
• Tax Advisor/CPA: Provides guidance on income, gift, and estate tax implications specific to your situation.
• Philanthropic Advisor: For significant giving, a specialist can help develop a strategic giving plan aligned with your goals.

These professionals often work as a team. For example, your financial advisor might suggest using appreciated securities for a bequest, your attorney drafts the language, and your CPA models the tax outcomes.

Leveraging Free Online Tools: Platforms like ours offer free will-making tools that can incorporate charitable bequests. These are designed to be user-friendly and a great starting point, especially for straightforward estates. However, they are not a substitute for professional advice in complex situations. Explore our free estate planning tools to begin your journey.

Summary and Final Thoughts

Leaving money to charity in your will is a profound act of generosity that creates a legacy extending far beyond your lifetime. This guide has walked you through the entire process: understanding what a charitable bequest is, choosing the right type for your situation, crafting precise legal wording, avoiding common pitfalls, selecting charities wisely, communicating with family, considering tax implications, and keeping your plan updated.

Key takeaways to remember:

1. Charitable bequests are flexible and powerful. They allow you to make a significant impact without affecting your current finances.
2. Precision is crucial. Always use the charity's full legal name and EIN, and work with an attorney to ensure your will's language is unambiguous.
3. Integration is key. Your charitable gifts should be part of a holistic estate plan that prioritizes your family's needs first.
4. Communication prevents conflict. Talking to your family and executor about your plans fosters understanding and smooth administration.
5. Regular reviews keep your plan relevant. Life changes, and so should your estate plan to reflect your current wishes and circumstances.

By taking these steps, you transform your values into action, providing vital support to causes you cherish and inspiring others through your example. Your bequest becomes a lasting testament to a life well-lived, contributing to a better world for generations to come.

Ready to start or update your plan? Our free, easy-to-use online tools can help you create a will that includes your charitable wishes. Begin your legacy today at our will maker. For more insights on estate planning and charitable giving, explore our full library of estate planning resources.