A bequest is a gift of any amount made to the Horatio Alger Association of Distinguished Americans, Inc. in your will. You may include a charitable bequest when you execute a new will, or you can add it to an existing will through a codicil.

In addition to giving you the satisfaction of ensuring the American Dream for future generations, a charitable bequest usually provides large tax savings. Because the gift is deductible from your adjusted gross estate, it may reduce or eliminate estate taxes.

Bequests can take various forms, and we describe each below and provide sample language for you to consider.

Specific Bequests

A specific bequest states a specific amount or specific asset. It may be a gift of cash, securities, real estate, or tangible personal property. Example:

I give [the sum of _____________ Dollars ($________)] to the Horatio Alger Association of Distinguished Americans, Inc. (Tax ID# 13-1669975) located in Alexandria, VA. The income shall be used for the unrestricted needs of the Association’s educational programs.

Residuary Bequests

Names the Horatio Alger Association of Distinguished Americans, Inc. to receive all or a percentage of the remainder of the estate after specific bequests have been fulfilled. Example:

I give [____ percent] or [the remainder] of my residual estate to the Horatio Alger Association of Distinguished Americans, Inc. (Tax ID# 13-1669975) for the unrestricted needs of the Association’s educational programs.

Contingent Bequests

Takes effect only if all primary beneficiaries named in the will predecease you. Declaring the Horatio Alger Association of Distinguished Americans, Inc. a contingent beneficiary can prevent the property from going to the state if there are no heirs. Example:

If [name of beneficiary] predeceases me, I give such property to the Horatio Alger Association of Distinguished Americans, Inc. (Tax ID# 13-1669975) for the unrestricted needs of the Association’s educational programs.

Testamentary Trust

With a testamentary trust, you direct that part or all of your estate is left in a charitable remainder trust, with income to be paid to one or more beneficiaries. Upon the death of the surviving beneficiary, the principal will be transferred to the Horatio Alger Association of Distinguished Americans, Inc. to be used as you designate. A testamentary trust is particularly attractive to someone who wishes to provide income for a spouse or other relative but wants the remainder to come to the Horatio Alger Association. In addition, this type of gift frequently produces tax advantages.

Documentation

In order to recognize you as a Horatio Alger Association Donor, please provide the Association with some simple documentation of the provision in your will or living trust. That documentation might consist of a letter or a copy of the portion of your estate document that refers to your designation to the Horatio Alger Association of Distinguished Americans, Inc.

Your planned gift in support of the Horatio Alger Association’s educational programs is also a gift to the deserving young recipients of the Horatio Alger Scholarships. Every gift is deeply appreciated and carefully stewarded. If you prefer, we will keep your name confidential.

Naming the Horatio Alger Association of Distinguished Americans, Inc. as a beneficiary of your retirement plan account is one of the easiest ways to make a planned gift, and in many ways is similar to making a bequest. Simply call your plan administrator and request a Change of Beneficiary form. In the beneficiary section, list ‘Horatio Alger Association of Distinguished Americans, Inc.’ (Tax ID Number: 13-1669975) as the primary beneficiary for all or a portion of the account. Then return the form to your plan administrator and send a copy to us for our records.

Another Alternative: Retirement Plan Assets and Testamentary Charitable Remainder Trusts

A charitable remainder trust funded with retirement plan assets is a great way to reduce estate taxes, provide a lifetime income stream to one or more beneficiaries, and to make a charitable gift—all at the same time. They provide income to one or more beneficiaries for life with the remainder interest going to charity upon the death of the income beneficiaries.

The decedent’s estate receives an estate tax deduction for the present value of the Association’s interest in the retirement plan assets. The trust itself is tax-exempt so no income taxes will be due when the retirement plan assets are received by the Trustee. When the trust terminates, the remaining assets will be paid to the Horatio Alger Association of Distinguished Americans, Inc. and used for the Association’s educational programs.

Please Note:
This information is not intended to be considered legal or tax advice. For advice regarding all matters associated with charitable giving, please consult an attorney and/or a professional tax advisor.