After planning for the inheritance of your loved ones, you may also want to continue supporting a charitable cause even after your death. Through legacy gifting, you will be able to donate a portion of your estate to a worthy cause that may have been dear to you in your lifetime.
There are several options available if you are planning to give a gift to charity through your will. In making your decisions, you have to consider the nature of the non-profit entity you will provide with the legacy gifting.
What is legacy giving?
With a plan, you can also choose to set up your own structure for the distribution of your gift. In Singapore, there are three common legal structures:
- Public companies limited by guarantee
- Charitable trusts
Setting up these legal structures may require registration and application for charity status. For societies and public companies limited by guarantee, you also have to apply for (IPC) status.
While it provides you with greater flexibility in determining how funds can be managed, setting up your own charitable organisation can be costly.
Here are the other means for you to able to leave to charity through your will:
1. Legacy gifting through charitable bequests
The simplest way to donate to charity is through charitable bequests to societies, organisations or public companies. As the owner of your estate, you only have to include a statement in your will that you are intending to provide a gift to charity and specify the details of your donation.
A gift can be a specific amount of money, property, shares or investments, personal belongings, or even a percentage of the value of the total estate. If you will donate to charity, make sure that you provide precise information about the gift, as well as the charity name, address and registration (if applicable).
Exact identification is vital in order for both the asset and beneficiary to be easily located. It also helps clarify your legacy gifting intentions and avoid challenges in the validity of your gift to charity.
2. Legacy gifting through charitable trusts
What is legacy giving through trusts?
A charitable trust is an arrangement wherein you appoint trustees who would be responsible for administering your assets in accordance with the legacy gifting intentions set out in your trust deed.
You can choose to create a charitable trust within your will, and set forth how the income will be distributed. Here are two ways to set up a charitable trust:
Charitable remainder trusts
This type of charitable trust operates like normal trusts, as it pays income to the donor’s heirs for life or for a fixed number of years. The income can be assigned as a fixed percentage of the value of the trust or a definite amount. After these payments are settled, the remainder becomes a gift to charity.
Charitable lead trusts
In this arrangement, the income is allocated first to the charity (based on a percentage or a fixed amount), and the remainder is given to the donor’s beneficiaries.
Clearly, there are many options when it comes to preparing the , and ensuring that your legacy lives on after your death. Other ways may also include familiarization with and .
Legacy gifting is a noble way to provide for a charitable cause after your passing. Giving a gift to charity allows you to leave something behind for society, and is in itself, a powerful legacy.
Here at Kith & Kin Law Corporation, we offer expert advice on Legacy Giving to . If you are thinking of leaving a gift of charity in your will and would like our assistance, today.