Dāna In Your Will: Charitable Bequests
Many old students have a volition to make a significant donation to further the spread of Dhamma in the world. However, responsibilities as householders tempers this enthusiasm to give. Our Vipassana organization also wants you to look after your householder responsibilities carefully. This section of the website will discuss a few of the ways in which old students might consider giving dāna without neglecting their other financial obligations.
This tradition has always promoted family welfare and harmony. We ask you to be careful and cautious in coming to any decision about a charitable bequest in your will. Please make a decision that is appropriate and responsible. You should make sure that the decision is taken neither out of ill-will towards your children nor overlooking your responsibility toward your parents or other dependents. Please read all the options discussed below very carefully.
Each country has its own tax laws that control what a citizen can do with regard to passing on some portion of their wealth when they pass away. Most of the legal concepts discussed here relate to U.S. Trust and Estates law. Please consult your own financial planner, attorney, chartered accountant or other person on whom you rely for legal and tax advice in determining which of these techniques might be available to you in your country and how to structure a charitable bequest in your financial and estate planning.
It should also be kept in mind that all of our centers are owned and operated by either a charitable trust or a non-profit corporation that is qualified and registered as a tax exempt organization in its country. Each donation should be given directly to one of such organizations in order to receive the most advantageous tax treatment under the local tax laws for the donation. The name and address of your local Vipassana charitable organization can be obtained from the Area Teacher responsible for the center or trust in your area.
Outright Bequests to A Charity
This is the most basic way of giving dāna after your demise. You simply direct in your will that your entire interest in certain money or property be transferred to a designated trust or non-profit corporation. In doing so your estate will usually be eligible for a charitable deduction for the full fair-market value of the gift.
An outright gift can take several different legal forms. These include:
A General Bequest
This is probably the most popular type of charitable bequest. You simply leave a specified dollar amount in your will to a designated trust or non-profit corporation.
A Specific Bequest
In such a bequest you designate certain specific property that you want a particular trust or non-profit corporation to receive under your will.
A Residuary Bequest
This type of bequest is used to give all or a percentage of one's property after all debts, taxes, expenses, and all other bequests have been paid. This type of bequest can be used instead of or in addition to a general or specific bequest if the size of the state will allow it. That is, such a residuary bequest ensures that all other beneficiaries receive their bequest from the estate prior to distribution of anything to the trust or non-profit corporation.
A Contingent Bequest
A contingent bequest provides for the situation when a beneficiary dies before you do or decides they do not want to receive the bequest in your will. To allow for such an occurrence, you can name a trust or non-profit corporation as the contingent beneficiary. This will ensure that the property will pass to the trust or non-profit corporation in one of these situations instead of unintended beneficiaries.
Providing Income For a Beneficiary
It is not uncommon for family responsibilities to extend beyond one's own lifetime. Continued income is often needed to provide for a surviving spouse, elderly parents, children or others who count on you for their livelihood. In such situations an outright bequest to one of our Vipassana trusts or non-profit corporations may not be appropriate or responsible. However, here are other financial planning tools that can provide both a charitable gift and a stream of income for life (or a term of years) to one or more beneficiaries.
Testamentary Charitable Remainder Trusts
Basically, under a trust, property is transferred to a trustee to be held from the benefit of specified beneficiaries while the trust lasts. Most commonly, the benefit received by the beneficiaries is a payout from the trust. When the trust ends, such as after a period of years, the remaining trust property passes to another beneficiary.
While charitable remainder trusts are similar to other types of trusts, a distinguishing feature is that the amount distributed at it termination -- the remainder in legal terminology -- is paid to a charitable beneficiary. To qualify for special tax treatment under U.S. tax law (and perhaps other laws) the trust must be in one of two forms: a unitrust or an annuity trust.
The primary feature of the charitable remainder unitrust is that it provides for payment to your beneficiary of an amount that
may vary. The payment must equal a fixed percentage (at least 5% under current law) of the net fair market value of the trust
assets as valued annually.
While the charitable remainder annuity trust shares many feature in common with the unitrust, the major difference is that the annuity trust provides for a fixed payout. This amount must equal a specified amount of at least 5% of the initial fair market value of the gift in the trust.
Establishing a Trust
When creating a testamentary charitable remainder trust you must specify in your will:
- the amount of property to placed in the trust
- the type of trust vehicle to be used
- the term of the trust (a period of years or the lifetime of the beneficiary)
- the payments to be made and their frequency
- the beneficiary of the trust
- the provisions for the eventual distribution of the principal
If you establish a testamentary charitable remainder trust, your estate will be entitled to a charitable deduction equal to the present value -- as of the date of death -- of the remainder interest that will pass to the charity. In addition, if your surviving spouse is the only noncharitable beneficiary of the trust, your estate will also be allowed a marital deduction for the value of the spouse's payment interest.
The above discussion is intended to simply give old students some general idea of what is possible in the way of estate planning to pass dāna to one or more of our organizations that are responsible to spread Dhamma in the world. Please consult your own lawyer or other financial advisor for information about your own personal situation.
In certain regions of the the world Vipassana organizations have established under their local laws non-profit charitable trusts or similar entities to which a donation can be made to directly benefit the growth of Vipassana in those regions.
The Vipassana Community Foundation of the Americas is a U.S. tax-exempt non-profit entity that accepts donations to directly fund the growth and establishment of Vipassana Centers throughout North and Latin America. For more information visit: www.vcf.dhamma.org
May all Beings be Happy.