Wills and Bequests
A bequest is a way for an individual to transfer ownership of specific assets to persons or charitable organizations upon death. A will is the document through which the transfer is accomplished. Your attorney can assist you in drawing up a will using the language that is necessary to accomplish your wishes. A bequest enables you to make a charitable donation and retain control of your assets throughout your lifetime. Please use our legal name, Mount Mercy Academy to correctly identify us.
There are many ways a bequest can be funded.
- Cash from available funds on hand in donor accounts. This is the simplest and easiest but not everyone has significant amounts of cash.
- Securities, such as stocks and bonds, are often used to fund a bequest. If the securities have appreciated in value, there are tax advantages in donating them. The estate avoids incurring capital gain tax while at the same time gets a tax deduction equal to the market value at the time of death.
- Retirement Assets are an excellent source of assets to fund bequests. Retirement plans can be complicated and you need to carefully plan any withdrawals from retirement funds. Not only is there a potential income tax burden, but if there is a balance in your retirement account at your death, there may be estate taxes as well. Estimates are that taxes could eat up as much as 75-80% of retirement assets under certain circumstances.
- By designating Mount Mercy Academy as a beneficiary (it can be a contingent beneficiary after the death of a spouse) funds pass to Mount Mercy Academy free of taxes. The beneficiary may be the recipient of all or a percentage of the remaining funds in the account.
Please note the designation of any beneficiary of retirement fund assets cannot be simply written in your will or trust. The Academy must be designated as a beneficiary of the retirement plan. Everyone's personal circumstances are different, so please consult your tax advisor concerning the use of qualified retirement funds as a charitable gift.
- Life Insurance can be used in such a way that it is treated much like a bequest. By making a charitable organization the beneficiary (or a contingent beneficiary) of a life insurance policy, you retain lifetime ownership of the policy. You have the right to cash it in, borrow against it, and change the beneficiary. There are no current tax benefits and the gross proceeds will be included in your estate with an equal charitable deduction.
- Tangible Assets, such as art and antiques, may also be willed to a charitable organization through a bequest with the estate receiving an estate tax deduction equal to the value of the asset. Appreciation and savings in capital gain taxes are handled similarly to appreciate securities.
- Real Estate can be given either outright, with life tenancy for a survivor or with retained income for the life of a survivor. The property is not included in the donor's taxable estate if the bequest is an outright gift or if the donor's spouse is the survivor. There may be estate tax if someone other than the spouse is the named survivor.
- Testamentary Trusts may used in a will to establish charitable trusts and provide for estate tax deductions. For example, a donor might establish a testamentary trust to a charitable gift annuity to pay income for life to the surviving spouse. Other life income charitable trusts can be funded through a testamentary trust as well.
The Mount Mercy Academy Heritage Society was created in June of 2001 as a way to recognize donors who have made a bequest to the Academy in their estate plans. Heritage Society members understand the need to fortify Mount Mercy by providing gifts that will provide sustainability and support the mission of the institution far into the future.
Becoming a member of the Heritage Society is quite easy. In fact, you may have already qualified for membership if you have named Mount Mercy Academy in your estate plans or will.
When you inform us of your bequest or intentions, we respect your wishes for recognition or anonymity as you prefer. As good stewards, any details of your gift that you disclose are held in the strictest confidence. In addition, if the gift is for a scholarship it can be an enduring and lasting honor made in your memory or that of a loved one.
A careful review of your assets will identify the best way to make a gift, whether the gift is of a specific asset, such as real estate or stock; or a percentage of your total estate. Donors often find a gift to the Heritage Society enables them to use assets that may otherwise be lost to estate, income, or capital gains taxation. In this way, your legacy is a lasting memorial to your values and interests. As you may understand, it helps for us to know your plans ahead of time so that we can thank you now, rather than thank your heirs or executor, and express the importance of your gift to the future of MMA.
For more information about the Mount Mercy Academy Heritage Society, contact Leanne Maloney at firstname.lastname@example.org