A bequest to a charitable organization is a tried-and-true estate planning technique. Whether a bequest is a specific bequest, a percentage bequest, or a remainder bequest, a donor’s decision to include such a provision in an estate plan is a useful and popular way to support an organization like yours for years to come. Indeed, according to Giving USA, individuals gave an estimated $41.19 billion to charities through bequests in 2020, up 10.3% from 2019.

Increasingly, though, advisors, charities, and families may find themselves in situations where the validity of a will or other estate planning document is subject to challenge. Indeed, a “draft it and forget it” approach to bequest planning is likely not sufficient. It’s wise to help your donor look at all aspects of a future bequest during the planning stages, working hard to cover all the bases.

To help ensure that a bequest goes smoothly from beginning to end, remind your donor that the best time to make philanthropic plans really is right now. By being proactive, your donor has nothing to lose and everything to gain in ensuring that charitable wishes are carried out.

Sometimes a donor wants to leave bequests to multiple organizations and therefore prefers to adopt a holistic planning strategy. In a situation like this, the community foundation frequently works with nonprofits and the donor to establish a “shell fund” to receive bequests after the donor passes away.

A shell fund allows a donor to lay out charitable intentions, including supporting your organization and other charities, to build a broad charitable legacy. A donor can name the fund, and the shell fund agreement can be modified anytime before the donor’s death.

Please reach out to the Winona Community Foundation to learn how shell funds and other planning tools can help you and your donors avoid potential future challenges and help protect your donors’ philanthropic goals to support your mission.