There are many reasons why a person may choose a non-profit, educational institution, or other entity as their beneficiary instead of a person. They can leave a portion of their estate to the entity or they can leave their entire estate. They may not have family, the family may already be well off, or they could be estranged from their family.
Whatever the case, you are perfectly within your rights if that is what you choose to do. Here’s what you need to know.
What are the Types of Beneficiaries?
There are several types of beneficiaries that you can consider, your spouse, friends, family, a charity, a university, or even the government which after your death would be estate taxes.
When you are considering what will happen to your estate after you pass on, you will have to look at this. Planning your estate thoughtfully will allow you to assess your assets as well as potential beneficiaries and decide if you will divide it into portions for other beneficiaries, or if the bulk of it will go to the entity.
What is an Entity Beneficiary?
While the beneficiary is legally designated to receive the benefits that you allocate from any financial products that you name, the type of beneficiary can be either a person or an entity.
In a will, an entity is an individual, a single organization, a group, a trust, a corporation, or an organization. So when you are planning how your estate will be divided and disbursed, you need to keep in mind that you must be as specific as possible because the language can be ambiguous. If you want all or part of your estate to go to a certain non-profit, then name that non-profit. Be very specific.
Can a Non-Profit Beneficiary be Contested by Your Family?
Your spouse and children may try to challenge your trust or will because they do not want that portion of your estate to go to the beneficiary. This can create problems by slowing the probate process. The challenges can create difficulty in ending it, causing it to drag on and on.
They may challenge it because it affects the portion that they receive and they may feel that it is rightfully theirs. However, these challenges do not get overturned often because it was the person’s expressed request.
How do You Name a Charity as Your Beneficiary?
There are three steps to naming a charity beneficiary. It is not a difficult or drawn process at all.
- Decide on the charity or cause that you wish to support
- Decide the type and/or amount of gift that you want to make
- Include the gift with the charity expressly named in your Estate Plan
It’s really that easy.
There is one more step though that while it is not required, it is recommended. Talk to your family and friends. Make sure that they understand what you are doing and are on board. This should minimize the possibility of anyone challenging your gift once you pass.
Contact Beasley & Ferber for Assistance
If you are ready to begin your own estate planning and would like to include a charity or non-profit as a beneficiary, let us help. At Beasley & Ferber we have the knowledge and experience to make estate planning quick and easy. Call today and schedule an appointment and get started.
