Bequests Frequently Asked Questions and Answers
- The University of Florida Bequest Society (PDF)
- How can I make a bequest to the University of Florida Foundation, Inc. (Foundation)?
- What is a will?
- What is a revocable living trust?
- How does the revocable living trust differ from a will?
- Does that mean I do not need a will?
- How does the administration of a will differ from that of an estate being passed by a revocable living trust?
- Will probate occur if I have no will or revocable living trust?
- Do all assets go through probate?
- Are only probate assets subject to estate taxes?
- If I wish to make a charitable bequest, is there a limit on the amount I can gift?
- I have heard that you make "specific bequests." What is meant by this term?
- Is there any caution that one should take when making specific bequests?
- I have also heard that I can make "contingent bequests." What would be an example of one and when might I want to use one?
- Are there other types of bequest provisions that I can make?
- Can I designate how my bequest will be used to benefit the University of Florida?
- If I create an endowment of over $100,000 for non-athletic purposes, will my gift be matched by the State of Florida?
- Will I receive public recognition for making and documenting a bequest to benefit UF via the Foundation?
- Are all types of bequest provisions recognized for the two recognition societies?
- How do I document my bequest and elect membership?
- Is it worthwhile to involve an estate planning professional in this process?
Q: How can I make a bequest to the University of Florida Foundation, Inc. (Foundation)?
A: You make the bequest through legal documents, a will or a revocable living trust.
Q: What is a will?A: A will is a legal document based upon the laws of the state in which you are domiciled (registered to vote). The will enables you to say how your estate will be distributed and names the person or persons (the personal representative or executor) who will be responsible for managing and distributing the assets of your estate (includes collecting debts owed to you, and paying your valid debts). The will also enables you to name a guardian, if you have minor children.
Q: What is a revocable living trust?
A: It, too, is a legal document. Think of it as a will substitute that can do all that a will can do, but it can also provide management of your assets during your lifetime, if that is needed or desired. The management is provided by a successor trustee (normally, you are the initial trustee) named in the trust document.
Q: How does the revocable living trust differ from a will?
A: Assets passed under a will are held or owned in your name, typically. With a revocable living trust, assets are transferred into the revocable living trust's name.
Q: Does that mean I do not need a will?
A: No, you will need to have what is referred to as a "pour-over" will. This document says that if you have forgotten or did not know about assets that you might come to own and have not transferred these assets into your revocable living trust, they will be presumed to have been transferred into the living trust.
Q: How does the administration of a will differ from that of an estate being passed by a revocable living trust?
A: A will goes through a court supervised process called probate. Probate is the legal title of the process for transferring title of the property being passed by the estate. Probate can be an open process; trusts are not as open (to the public) a process.
Q: Will probate occur if I have no will or revocable living trust?
A: Yes, you are said to die intestate (having no legal will). The court will appoint a personal representative or executor, and the state statutes define (since you have not) how your estate will be divided (taking into account living heirs and relatives).
Q: Do all assets go through probate?
A: No, assets that involve contracts do not. An example of this would be an insurance policy or a qualified retirement program (Keogh, IRA, 403 (b), etc.). They pass directly to the named beneficiary in the contract. Deeds holding property in joint ownership with right of survivor also do not go through probate. A bank or brokerage account held in your name and "In Trust For …." is another example. In these instances your will could say they go to "an heir's name" but if this differs from what is in the contract, etc. the heir will not receive the assets. Remember that because retirement programs can be subject to both estate tax and income tax (to heir receiving assets) you may wish to consider a charitable beneficiary.
Q: Are only probate assets subject to estate taxes?
A: No, any asset in which you own any incidents of ownership will be part of your taxable estate.
Q: If I wish to make a charitable bequest, is there a limit on the amount I can gift?
A: No, there is no estate tax limitation on the amount that you give and deduct on your estate tax return.
Q: I have heard that you make "specific bequests." What is meant by this term?
A: These are the first bequests stated in your will and to be carried out under your will. They may be stated in a number of ways such as: "I give and devise my 2005 Ford Taurus to my son, Joe…"; "I give and devise my Dell computer to my good friend, Mary…"; or "I give and devise my entire holding of Wal-Mart stock to my cousin, Tom..."
Q: Is there any caution that one should take when making specific bequests?
A: Certainly, notice the last specific bequest stated above. It says, "I give and devise my entire holding of Wal-Mart stock to my cousin, Tom..." If you own no Wal-Mart stock at the time you die, your cousin would receive nothing. A better way of stating that specific bequest would be to say, "I give and devise my entire holding of 150 shares of Wal-Mart stock to my cousin. If at the time of my demise, I hold no Wal-Mart stock I give my cousin the equivalent dollar amount that 150 shares would be worth on the date of my demise."
Q: I have also heard that I can make "contingent bequests." What would be an example of one and when might I want to use one?
A: An example can be found in our specific bequest to "my good friend, Mary." If the friend dies before you die, would you want that bequest to go to her heirs? The answer is "probably not." You can change that happening by simply adding a statement to that bequest saying, "If my good friend, Mary, dies prior to my demise or within sixty days of my death, this bequest shall lapse and the assets shall go to the University of Florida Foundation, Inc., for the highest and best use of the University of Florida, as determined by the then President of the University of Florida."
Q: Are there other types of bequest provisions that I can make?
A: Yes, you can also do either a "general bequest" or a "residual bequest." A general bequest is something made out of general assets of the estate (example- "I give and devise $25,000.00 to Ted."). A residual bequest passes any assets not given through specific or general bequests (example- "I give and devise all the rest and residue of my estate to the University of Florida Foundation, Inc.").
Q: Can I designate how my bequest will be used to benefit the University of Florida?
A: Yes, you may specify the use (undergraduate scholarships, graduate fellowships, specific research, faculty support, equipment needs or resources, buildings or facilities, program enrichment, unrestricted use to meet changing, priority needs) and specify area or unit to benefit (the University of Florida, a college, a school, a department within a college, a center, an institute, the George A. Smathers Libraries, the Samuel P. Harn Museum of Art, the Curtis M. Phillips Center for the Performing Arts, UF's television or radio stations, athletics, etc.). You determine if the gift you give will be utilized short term or if an endowment (principal stays in perpetuity) named for you or a loved one will be created. An endowment currently requires a gift of $20,000 or more. (For specific funding levels for academic chairs, professorships, graduate fellowships, etc. see the website and contact staff, as it may vary from college to college.)
Q: If I create an endowment of over $100,000 for non-athletic purposes, will my gift be matched by the State of Florida?
A: That is currently true, but your estate gift is only matched when it is actually received by the Foundation, after your demise. The Florida Legislature could change or modify the statute providing for the match, but it has existed since the early 1980's. Currently the match on $100,000 is 50%, and it increases to a 100% match on gifts of over $2,000,001.
Q: Will I receive public recognition for making and documenting a bequest to benefit UF via the Foundation?
A: Yes, we have two recognition societies, if you would allow us to recognize you. The Bequest Society recognizes Members (documented bequests of $10,000 or more) and Distinguished Members (documented bequests of $100,000 or more). The President's Council recognizes documented bequests at multiple levels (Distinguished, Society, Academy, Cabinet, and Laureate) for documented bequests from $250,000 to $25 million.
Q: Are all types of bequest provisions recognized for the two recognition societies?
A: General, specific, and residual bequest provisions to the Foundation are recognized for membership in the recognition societies. A contingent bequest provision is recognized only if it is contingent upon your spouse predeceasing you and the spouse has the same contingent bequest in his or her will. If the contingent provision depends upon any other family member (parent, child, etc.) predeceasing you, the bequest provision does not count for membership.
Q: How do I document my bequest and elect membership?
A: There are multiple ways to start the process. You can write a letter about the bequest you have in place (its size and purpose). If the bequest involves a residual bequest provision, you would need to give us a current estimation of what the value would be. You can have your attorney notify us and provide the same information. Or, finally you can fill in a Statement of Bequest Provision, sign, date, and return it to the Planned Giving Office (link address for statement: ). Ultimately, if the bequest involves the creation of an endowed fund, we would want to do a gift use agreement (an internal document meant to ensure that your gift is used as you designate). The agreement is NOT a contract because there is no exchange of consideration.
Q: Is it worthwhile to involve an estate planning professional in this process?
A: Absolutely. Your will and/or revocable living trust should be prepared by a licensed professional. This person should advise you on your entire estate plan, including beneficiary designations on assets that may avoid probate like IRA's, etc. The information provided above is for your general understanding of the estate process and is not meant to be legal advice.
Planned Giving | Charitable Bequests
