A Bequest to Save Taxes

Thomas was a widower who had a great love for his church and the Evangelical Free Church of America. As an individual who had directly benefited from our ministries, Thomas wanted to thank us with a gift from his estate.

Thomas told his attorney that he wished to leave a bequest to both his local church and us as part of his estate plan. Thomas's estate included some stocks, real estate and an IRA. Thomas's attorney recommended that he give the appreciated stock and real estate to his children and leave his IRA to the ministries that are important to him.

Thomas: My attorney told me that if I gave the stock and real estate to my children, these assets would receive a step up in basis at my death. My children could then sell them without paying tax. However, if I gave my children my IRA, the IRA would be subject to estate and income tax. After paying all these taxes, very little would be left for my family. By giving the IRA to my church and the Evangelical Free Church of America, I could make a nice gift and avoid any additional tax for my estate and children.

Thomas contacted his IRA custodian to obtain a beneficiary designation form. He filled out the form and designated our ministry with 50% and his church with 50% of his IRA account. Thomas's attorney then specified in Thomas's will the bequest of his other assets to his children.

Thomas: I was so impressed with my attorney's advice that I named him executor of my will!

Thomas called and notified us of his bequest. He was pleased that because his church and the EFCA are tax exempt institutions, both would receive the full amount of the IRA value tax free when he passed away. This allowed him to fulfill his charitable desires after death.

Is a bequest right for you?

It is easy and convenient to include a bequest in your will or living trust. This link includes sample bequest language that can very easily be included in your will.

You might find it helpful to print this page and the bequest language. Please feel free to give this information to your attorney. If he or she has any questions, please contact us.

For a brochure with more information, click here.

*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to the EFCA Foundation. Since your benefits may be different, you may want to click here to view a color example of your benefits.