When it comes to considering a gift to charity in our will, many of us ask ourselves, “Don’t I have to be wealthy to leave a bequest to charity? And won’t my family’s share of my estate be greatly reduced?” Let’s dispel these two myths once and for all!
Myth # 1 - I don’t have enough to leave a gift to charity.
It’s a common misconception that only the wealthy leave money to charity in their wills. Many people living on fixed and modest incomes decide to make some of the biggest donations of their lives through their estates. Even though you may not have the immediate means to make a large gift, designating a portion of your estate to charity is an opportunity to help build for the future and establish a lasting personal legacy.
Generally, an individual’s primary source of equity is their home, but additional assets also include any savings, retirement funds, and investments. With most of these being liquidated as part of your estate, making a bequest to a charity of your choice is the ultimate opportunity to make a much bigger gift than would be possible in your lifetime.
Myth # 2 - Doesn’t a gift to charity in my will mean less for my children?
There may be certain charities whose work has been meaningful to you over the course of your lifetime, and making a gift to them in your will is an important priority. However, you also want to ensure that the needs of your family are taken care of, and this is where the concept of the “charity child” can be helpful. When drafting your will, you could instruct that your estate be divided between all of your children (or nieces and nephews), plus one (or more), with the new addition being your charity of choice.
For example: Let’s say you have three children and the net value of your estate is $500,000. Instead of dividing your estate between your three children ($167,000 to each), you can decide to include a fourth party, a charity, and each would receive $125,000. While your children’s shares will be reduced, the tax credit resulting from your charitable gift will lessen this reduction, giving each child an additional $21,000, for a total of $146,000. (this figure can change depending on your personal circumstances).
You don’t have to be wealthy or famous to make a difference in your community, and by including a “Charity Child” in your will, you can leave a lasting legacy to the causes you love and still take care of your family.