What happens when I leave a bequest to a fund at Akron Community Foundation?
Have you considered updating your estate plan to leave a bequest to a fund at Akron Community Foundation? While loved ones are typically the first priority in estate planning, charitable giving through your estate lessens the tax burden on your heirs while establishing your legacy. In most cases, it is best to donate your most highly taxable assets. Consider a retirement plan, like an IRA, 401(k), 403(b) or pension. If the IRA were given to your family, much of the value may be lost through estate and income taxes. But, if you use retirement assets to start or contribute to an endowed fund at Akron Community Foundation, not only is the full value of your gift transferred to the fund tax-free, your estate will benefit from an estate tax charitable deduction.
Specific Bequests
Some bequests take the form of a "specific bequest," which means that the fund at ACF receives a specific amount of money from the donor's probate estate or trust. For example, for a specific bequest, your advisor might include a provision in your will as follows:
I bequeath $15,000 to Akron Community Foundation (Federal Tax ID #34-1087615), a tax exempt organization under Internal Revenue Code Section 501(c)(3), to be added to the [Name of Your Fund], a component fund of The Akron Community Foundation, and I direct that this bequest become part of the Fund.
In these situations, the foundation will be able to receive your bequest, typically as soon as the estate is settled.
Residual Bequests
In other situations, you may want to leave a bequest of a portion of the remainder of your estate after all specific bequests, expenses, and taxes have been paid. These types of bequests are called "residuary" bequests. The language can look something like this:
I leave all the rest and residue of my property, both real and personal, of whatever nature and wherever situated, and assets, including all real and personal property, tangible or intangible, to Akron Community Foundation (Federal Tax ID #34-1087615), a tax exempt organization under Internal Revenue Code Section 501(c)(3), to be added to the [Name of Your Fund], a component fund of Akron Community Foundation, and I direct that this bequest become part of the Fund.
Because the amount of a residuary bequest cannot be determined until all assets in an estate have been identified and valued, and all expenses and taxes have been paid, the designated charity, in this example, your fund at Akron Community Foundation) will not receive the full amount of a residuary bequest until the estate is completely settled. Typically, however, the estate's personal representative or trustee will make what is known as a "partial distribution" to the residuary beneficiary as soon as the personal representative has enough information about the assets and liabilities to confidently do so.
When you leave a residuary bequest to a fund of Akron Community Foundation, our team will be involved at various steps during the administration of your estate until final distribution. For example, our staff will receive regular communications about the estate related to assets, expenses, taxes, and periodic accountings. A staff member will execute documents, such as receipts, related to distributions and other estate transactions.
To learn more, contact Laura Lederer at 330-436-5611 or llederer@akroncf.org. We're always available to answer your questions about philanthropy or to schedule a personal consultation with you and your professional advisors – all at no cost.
Additional Resources
This article is not intended as legal, accounting, or financial planning advice.