Naming a Charity as a Beneficiary

Giving to a charity can be a rewarding experience, and incorporating charitable giving into your estate plan is a great way to donate to a cause that is close to your heart and share with those less fortunate.

However, it is important to understand that there are many ways to reach your philanthropic goals and that you have a lot of options for giving. Finding the one that best fits your charitable objectives can make all the difference.

Questions to Consider When Naming a Charity as a Beneficiary

Consider the following questions when making charitable giving part of your estate plan:

1. What goals are you looking to accomplish? Charitable giving can further your philanthropic goals in several areas, including religion, humanitarian endeavors, ecological issues, animal rights, education, and more.
2. Consider if there are existing organizations that support a cause that is in line with your goals?
3. Is your chosen cause something you would like to support during your lifetime as well as after your death? Donating during your lifetime, when possible, can also be an advantage from a tax perspective, and some causes benefit more from immediate donations.
4. What type of gift would you like to leave i.e money, assets, a percentage of your estate?
5. Do you want to simply donate funds or assets? Doing something that requires more involvement from your family may create a reason for your heirs to continue to interact after you are gone.

Most importantly, ask yourself, how you can best support your chosen cause. If you are donating money, do your homework. Make sure that an existing fund is sufficiently run and will continue to be able to use your gift effectively.

How to Add a Charity as a Beneficiary in Your Estate Planning Documents

You may not be able to afford to donate a large sum of money to your favorite charity during your lifetime. Because of this, you may choose to name a charitable organization as a beneficiary in your life insurance policy or retirement account, or to include a charitable donation, that won’t go into effect until you pass away, in your Will or Living Trust.

You will, of course, first want to make sure that all of your surviving family members will be provided after you die. But, naming a charity as a beneficiary in your estate planning documents is the simplest way to make a charitable gift after you pass away.

Naming a charity as a beneficiary may not cost you anything and it can be revoked or changed at any time. Here is how you do it:

1. Talk to your estate planning attorney about modifying your Will or Living Trust to include your chosen charity as a beneficiary. Other specialized estate planning tools, such as Charitable Lead Trusts, Charitable Remainder Trusts, and Private Foundations can offer more flexibility when being used to facilitate charitable giving in Virginia. Be sure to discuss these with your estate planning attorney as well.
2. Contact your life insurance provider and the financial institution that holds your retirement account to find out how your beneficiaries are currently designated. Then ask how you can add or change a beneficiary.
3. Identify and contact your favorite charity to find out their correct legal name and tax ID number (it’s important to get this exact). Then relay this information to your attorney, life insurance provider, and the financial institution that holds your retirement account, so that they can make the necessary changes.
4. It is also good practice to review your beneficiary designations from time to time, especially as your children become adults or your charitable causes change throughout your lifetime.
5. Let the charity know that you have designated them as a beneficiary. Many institutions have societies and events to honor those who have donated to their institutions or made plans to do so in the future.

If you have been looking for a way to add charitable giving to your estate plan, we hope you find this information useful. To learn more about naming a charity as a beneficiary in Virginia, we invite you to contact our law firm at (703) 553-2577 or use the contact form on our website to arrange a consultation with a knowledgeable and experienced Virginia estate planning attorney.

The information on this site is for general informational purposes only. The information presented in this site is not legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this site.