Wills and Bequests

Mount Mercy Academy is profoundly grateful for bequests, which leave an enduring impact on the education of the young women of Mercy.  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.   While this is often the simplest form of donation, it is not always an option for all donors.  Another method is designating Mount Mercy to receive a percentage of the residuary estate after all specific distributions are made and obligations of the estate are settled.

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.  Taxes can eat much of an estate.   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 appreciated 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.

Communicating Your Intentions

If you have provided for Mount Mercy Academy in your estate plans but have not previously notified the school of your intentions, please contact the Office of Institutional Advancement at 716-825-8796, ext 324 or institutionaladvancement@mtmercy.org.  Sharing your plans with us allows us to express our gratitude to you during your lifetime, ensures that your wishes will be met, and also assists the school’s long-term planning efforts.

Note: The information on Mount Mercy’s pages on planned giving vehicles is intended to provide general information that we hope will be helpful in your tax, estate, and charitable planning.  It is not intended as legal advice and should not be relied upon as legal advice.  For advice or assistance with your particular situation, you should consult an attorney or other professional adviser.