Legacy Gift Designation

By: Richard Carnes

You may be hesitating to make a legacy gift to your church because you don’t want to incur the expense of changing your will. Actually, there are numerous ways to arrange a future gift while leaving your current will intact.

1. You can name your church or other Baptist ministry as a beneficiary of any portion of the death proceeds from a life insurance policy.

2. You can instruct your bank to distribute any portion of what remains in your account to your church or ministry at the end of your life. This is called a payable-on-death (POD) account.

3. You can instruct your investment advisor firm to transfer to your church or ministry any portion of investments held at the end of your life. This is called a transfer-on-death (TOD) account.

4. You can name your church or ministry as a beneficiary of any percentage of the remaining funds in your IRA, 401(k), 403(b), or other defined contribution retirement plan.

In each case, you need only request and complete the beneficiary form provided by the financial institution. When a church or ministry is named as beneficiary through one of these arrangements, the proceeds are not governed by your will and are not subject to probate.

However, like the provisions in a will, these beneficiary designations can be changed at any time. You need only complete a new beneficiary form. Adding or removing a charitable bequest requires a will change, though you could do this with a simple codicil (amendment) if the rest of the will still expresses your wishes.

A charitable gift by beneficiary designation, like a bequest in a will, qualifies for an estate-tax charitable deduction and could result in estate-tax savings, depending on the size of your estate.

Increasingly, estate assets are transferred to beneficiaries outside of a will. The Kentucky Baptist Foundation is honored to work with individuals seeking how best to designate estate assets they wish to gift to their church or other Baptist ministry causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.