How to List a Charity as Your Beneficiary

A beneficiary is an individual or institution that stands to inherit all, or a portion, of the assets of an account in the case of the owner's death. Nearly every type of financial account allows you to name a beneficiary. Individuals may choose to designate a charity as a beneficiary, for moral reasons and for its tax benefits. For items not associated with an account, such as physical property, it's best to list the beneficiary in a will, even if the beneficiary is a charity.

Instructions

Adding Account Benefciiaries

1. Obtain a copy of the paperwork that's needed to add a beneficiary from your financial institution. The paperwork will vary depending on the type of account and where it's held, but in most cases -- such as a 401k, IRA or life insurance policy -- it will be a beneficiary designation form. In the case of a life insurance policy, the form will also ask for a specific type of designation.

2. Complete the forms sent by your financial institution. To add a charity as a beneficiary, you'll need the charity's full name along with its address and taxpayer identification number (TIN).

3. Return the completed forms to your financial institution. Be sure to follow up with the institution to ensure that the changes to your account have been successfully implemented.

Will Beneficiaries

1. Decide which charity you will bequest to.

2. In your will, describe exactly what you'll be gifting to the charity.

3. List the benefiting charity's full name, address and TIN.

Tips & Warnings

• When including a charity as a beneficiary in a will, be sure to accurately state the identifying information of the charity, including its TIN and full name. Also be very specific in naming exactly what you'll bequest upon your death. Being thorough in both of these steps will help ensure that disputes are not successful.

• There are several designation types when choosing a beneficiary of a life insurance policy, including revocable and irrevocable designations. Be sure that you understand the advantages and disadvantages of each before choosing a specific designation. Depending on your goals and individual financial situation, some options will be more advantageous than others.

• Depending on the type of account, you may need spousal consent before naming a charity as a beneficiary.

References

• The Money Alert: Leaving your 401(k) to a Charity
• GiftLaw Pro: Naming a Charity as Beneficiary
• Lawyers.com: Beneficiaries in a Will