Leave a Legacy
- Mary’s husband Joe just died of cancer. They have one adult daughter who lives in another state. During Joe’s lifetime, he was active in youth sports, and an umpire for the local Little League. Mary is a painter and long-time supporter of the arts. Mary and Joe have a net worth that would be subject to estate tax on Mary’s death.
- While Mary wants to provide for her only child after she is gone, she also wants to leave a local legacy that would be meaningful to both her and to Joe.
- Mary creates a charitable fund at the Community Foundation with a bequest that will come from her estate after her death.
- Mary signs a fund agreement with the Community Foundation, indicating that her bequest is to be used to provide yearly grants to the local Little League, a sports enrichment program for low-income children, and an art school.
- She states in her will that her fund held at the Community Foundation will be the beneficiary of 50% of her estate. The remaining 50% of her estate will go to her daughter.
- Because the Community Foundation is a 501c3 nonprofit organization, the gift from Mary’s estate is tax-deductible. As such, this gift reduces the taxable value of Mary’s estate, and results in her daughter receiving a greater inheritance from the estate than she would have had the entire estate been taxed. Not only does Mary provide for her daughter after she is gone, she also leaves a significant community legacy.