While multiple ways exist to make charitable gifts through estate plans, by far the two most commonplace are a provision in a will or living trust and/or naming a charity a percent beneficiary on a retirement plan or insurance policy.

Provision in a Will or Living Trust

A written provision can be as simple as “I give X to Y for Z,” or highly detailed depending on the desires of the donor. If you are interested in considering a gift more specific than the suggested bequest language can provide, please contact the Office of Planned Giving to have a confidential discussion about what you wish to do. We can provide suggested language that has been approved by the Foundation in advance, and thus makes your future planned gift happen exactly as you wish.

Typical bequest provisions designate a fixed dollar amount or fixed percentage of the estate residuary to the University of Maryland Baltimore Foundation, and then further designated to a school, department, program, or fund.

Using an attorney: While some choose to self-prepare wills, a majority of wills are still written and executed using professional legal services, i.e., a trusts and estates attorney or one who practices family law. Trusts, established while alive or through a will provision, almost certainly should be planned and executed through a qualified attorney, as they are highly flexible, state-specific, and have a long list of uses and functions (including charitable remainder trusts and charitable lead trusts).

Beneficiary of a Retirement Plan or Life Insurance Policy

An alternative to including a provision in a will or living trust, another popular option is to name University of Maryland Baltimore Foundation a 1-percent to 100-percent beneficiary of an IRA, 401(k), 403(b), TSP, etc. This strategy of giving has both advantages and disadvantages worth considering.

Advantages include:

• Ease of execution via single page or online phone
• Revocability be either changing the form or spending down the account for lifetime needs
• Giving estate assets that are 100 percent taxable to any other beneficiary, including the estate itself
• Using this method frees up more assets to leave to family and heirs

The disadvantages are minor, but still important to consider:

• First, beneficiary forms do not allow any detail beyond the name of the Foundation, so additional designation or restriction necessitates a letter to or written agreement with the Foundation.
• Second, beneficiary forms do not allow a fixed dollar amount, so the value of the gift is both unpredictable and fluctuates due to market forces or the account being spent down for life needs.

Still, the convenience and tax advantages make a beneficiary form one of the best tools for charitable giving.

Beneficiary forms of life insurance and ROTH IRAs might be less advantageous than other bequest methods for the reasons that the distribution is free of income tax to the beneficiaries, i.e., the family, unlike traditional IRAs and retirement funds. Insurance and ROTHs have the same advantage, however, of being easy to execute and revocable if lifetime needs take precedence.

Planning an Endowed Fund via a Will Provision or Beneficiary Form

Donors who believe their bequest might be valued at $50,000 or greater have the option of planning a named endowed fund. Please contact us to learn more about the logistics and considerations in planning an endowment through your estate.