Have you ever wondered where museums get their collections, artwork, and other displays? Sometimes, the museum purchases items that come up for auction. Still, many other times, a museum may receive a collection, antique, or further curiosity as a charitable donation from the estate of a person who wanted their possessions to go on display for others to enjoy.
Do you have a special item, collection, or heirloom and are unsure who to pass it down to in your will? Are you worried that your children or grandchildren will not treasure your collection the way you have? You can create a charitable bequest in your will, which not only preserves your items but may also provide valuable tax breaks for your estate.
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What is a Charitable Bequest?
Charitable bequests are gifts made to a qualified, tax-exempt charity when the giver passes away. Many choose charitable bequests because they believe in the organization’s work or mission. When you donate part of your estate, whether it’s property, cash, or other assets, your estate receives a tax deduction for the value of your legacy.
If you and your Texas estate planning lawyer are careful, you can save your family a significant amount in income taxes for assets they receive.
Types of Charitable Bequests in Texas
Bequests as a form of charitable giving are provisions in your will that directs certain assets or pieces of property to be given to a charitable organization or museum after you pass away.
There are three types of bequests that you can include in a living trust or a will, and your estate planning attorney can help you understand the implications of each one for your intended charitable bequest:
- Specific bequest. This is a gift of a specific item, collection, or amount of money to a charitable organization.
- Residuary bequest. This is a gift of the remainder of your estate to a charitable organization after all other allocations have been distributed. For example, you may leave specific gifts or amounts of money to various family members, and then whatever is left over would go to your charity of choice.
- Contingent bequest. This takes effect only when certain conditions are met. For example, if the primary beneficiaries of your estate predecease you, then whatever you would have given to that beneficiary would instead be gifted to an organization, museum, or charity.
To ensure you get the maximum tax benefits from a charitable organization and that the entity you’re planning to donate to is on the up-and-up, it’s important to consult with an experienced estate planning attorney.
Bequeathing a Collection or Other Items
Many people spend years, or even their entire lives, collecting certain items like stamps, rare coins, or antique dolls. Collectors pursue their collectibles as a hobby, possibly as an investment, but all see collecting as a labor of love.
Instead of your collection going to a family member who wouldn’t appreciate it or being sold piecemeal at an auction or estate sale, you could bequeath the collection to a museum so millions of people can enjoy it.
Or, perhaps you have a family heirloom and no one to pass it down to. Museums may also take single items. It might take some research to determine where it would be appreciated most, but this is something that you and your attorney may look at together.
Including Bequests in Your Estate Plan
Do you have a collection, antique furniture, or another item of value you’d like to donate? Are you concerned about rare and valuable collectibles being sold off instead of kept together as a collection you’ve spent your lifetime building? You can ensure that your most treasured possessions are protected and allocated according to your wishes by including specific instructions, known as bequests, in your estate plan. We hope this information has been helpful when navigating the intricacies of Charitable Bequests.
