Charitable bequests are a common part of estate planning. But before you decide to leave money to an organization either be a bequest in your Will or a Charitable Remainder Trust, it’s important to do your homework and make sure your favorite “charity” is really a legal charity.
The Internal Revenue Service recognizes public charities and private foundations. Your estate can deduct the value of contributions to either type of organization on any federal or state estate tax return that is due. To ensure your charities are eligible organizations, you should check with the IRS, which maintains and regularly updates its list of exempt organizations. The IRS website has a searchable database. Make sure you know the IRS-assigned tax identification number for any organization you wish to give to, as well as the name of any affiliated group the organization reports to (tax exemptions are often issued in the name of a parent or umbrella group).
Working with a qualified estate planning attorney, you should also get in touch with the organizations that you intend to make bequests to. Many charities and foundations have an assigned planned giving officer who can provide specific information on how and where any gifts should be made. If your bequest is part of your Will, this person can serve as a contact point for your executor.