Charitable Bequest in a Will: 2026 Guide

What Is a Charitable Bequest in a Will?

A charitable bequest is a gift to a qualifying nonprofit organization made through your last will and testament, taking effect at your death. It requires no present transfer of money or assets, can be revoked at any time by updating your will, and qualifies for an unlimited federal estate tax deduction under Internal Revenue Code § 2055(a). Any estate — taxable or not — can include one.

Key takeaways

• A charitable bequest under IRC § 2055 carries no dollar ceiling on the estate tax deduction; a gift of your entire estate to a qualified charity can eliminate federal estate tax entirely.
• The 2026 federal estate tax exemption is $15 million per person ($30 million per couple) under P.L. 119-21 — but bequest planning still matters for the roughly 15 states that impose their own estate or inheritance taxes at far lower thresholds.
• Bequest giving totaled $45.84 billion in 2024, representing 8% of all U.S. charitable giving, according to Giving USA 2025.
• The single biggest missed opportunity in charitable bequest planning is choosing the wrong asset type — the right swap can create tens of thousands of dollars in extra value for your heirs and your charity simultaneously.
• A charitable bequest written into your will is revocable; you can change or remove it anytime before death without penalty.

The Four Types of Charitable Bequests

Every charitable bequest falls into one of four structural categories. You can use more than one in the same will.

Bequest Type	What It Gives	Best Used When
Specific	A named dollar amount or identified asset ("$50,000 to the ACLU")	You want certainty about what the charity receives
Percentage	A set proportion of the estate ("5% of my estate")	You want the gift to grow or shrink with your estate value
Residuary	All or a share of what remains after debts, expenses, and other bequests	You want charity to receive the "leftovers" with minimal effort to calculate
Contingent	A gift that triggers only if a named beneficiary cannot inherit ("If my daughter does not survive me, 100% to St. Jude's")	You want to protect family first while ensuring the estate doesn't pass to the state

Specific bequests are settled before residuary bequests during estate administration, so they carry slightly less risk of being reduced by estate expenses. However, a specific dollar bequest does not grow if your estate grows significantly before your death. A percentage or residuary bequest adjusts automatically.

The Asset You Choose Matters More Than the Amount You Give

Every article ranking for "charitable bequest" focuses on how much to give and which type of bequest to use. None of them explain the decision that has the largest measurable impact on your legacy: which specific asset you assign to charity versus which asset you leave to your heirs.

This matters because different assets carry radically different tax burdens when they change hands at death.

Why traditional IRAs and 401(k)s are almost always the right asset to give charity

When an individual heir inherits a traditional IRA, the SECURE Act (P.L. 116-94, 2019) generally requires them to withdraw the entire account within 10 years of your death. Every dollar they withdraw is taxed as ordinary income at their own marginal rate — which can be 22%, 24%, 32%, or 37%. A charity, by contrast, pays zero income tax on those same funds. Every dollar arrives intact.

Appreciated stocks, real estate, and other non-retirement assets receive a step-up in basis at death under IRC § 1014, wiping out capital gains accumulated during your lifetime. Your heirs can sell those assets immediately after inheriting them and owe no federal capital gains tax on pre-death appreciation. That makes appreciated assets efficient to leave to people — but leaving them to charity wastes the step-up, since charities don't pay capital gains tax anyway.

Worked example: $48,000 difference from one swap

Margaret is 72 and owns two assets she plans to split equally between her daughter Emma and her alma mater:

• Traditional IRA: $200,000
• Appreciated stock portfolio: $200,000 (cost basis: $50,000)

Scenario A — common approach (stock to charity, IRA to Emma):

• University receives $200,000 in stock. It sells immediately, pays no capital gains tax: $200,000 to charity.
• Emma inherits the $200,000 IRA. Under the 10-year SECURE Act rule, she withdraws the balance at a 24% federal rate: $200,000 × 24% = $48,000 in income tax. Emma nets $152,000.
• Combined value created: $352,000

Scenario B — optimized swap (IRA to charity, stock to Emma):

• University receives the $200,000 IRA. It pays zero income tax: $200,000 to charity (same as Scenario A).
• Emma receives the $200,000 stock portfolio. At Margaret's death, basis steps up to $200,000. Emma sells and owes zero capital gains tax. Emma nets $200,000.
• Combined value created: $400,000

The charity receives the same $200,000 either way. Emma receives $48,000 more. The only difference is which asset Margaret assigned to which recipient — a decision that takes one sentence to make in the will and one update to the IRA beneficiary form.

Asset-matching decision table

Asset	Leave to Charity?	Leave to Heirs?	Reason
Traditional IRA / 401(k)	✅ Best choice	❌ Heirs taxed at ordinary income rates (up to 37%)	Charity pays zero income tax; heirs lose 22%–37%
Roth IRA	❌ Not ideal	✅ Qualified distributions tax-free to heirs	Heirs receive Roth funds tax-free; wasted on charity
Appreciated stock / funds	✅ Acceptable	✅ Preferred	Step-up in basis at death erases capital gains for heirs
Cash	✅ Works	✅ Works	No tax differential
Real estate (highly depreciated)	✅ Slight edge	✅ Step-up helps	Charity avoids depreciation recapture; heirs get basis step-up

Critical detail: Retirement accounts pass by beneficiary designation, not through your will. To implement this strategy, name the charity directly as beneficiary on the IRA or 401(k) account form — don't rely solely on a will provision. As explained in our guide to beneficiary designations vs. your will, a beneficiary designation overrides a conflicting instruction in the will every time.

How to Add a Charitable Bequest to Your Will

1. Identify the charity and verify its eligibility. Confirm the organization is a qualifying recipient under IRC § 2055(a) using the IRS Tax Exempt Organization Search at apps.irs.gov/app/eos/. Note the charity's full legal name, address, and EIN — all three should appear in the bequest language to prevent misdirection.

2. Decide the bequest type and asset. Use the asset-matching table above. Choose a specific dollar amount, a percentage, a named asset, or a residuary share — whichever fits your goals. If you want the gift to reflect your estate's ultimate size, a percentage or residuary bequest serves that better than a fixed dollar figure.

3. Draft bequest language precisely. A specific bequest might read: "I give $25,000 to [Charity Legal Name], a 501(c)(3) organization located at [Address], Tax ID [EIN], for its general purposes." A residuary bequest might read: "I give 20% of the rest, residue, and remainder of my estate to [Charity], Tax ID [EIN], for general use." Add "safety language" directing your executor to apply the gift to the charity's nearest equivalent purpose if the named organization ceases to exist.

4. Update your beneficiary designations separately. If you're directing retirement assets to charity, update the beneficiary designation form on each account. This step is independent of the will.

5. Execute the will properly for your state. Every U.S. state requires a will to be signed by the testator and witnessed by at least two adults who are not named beneficiaries. Many states also allow a self-proving affidavit, which simplifies probate. Create your will online and receive state-specific execution instructions with the document.

6. Notify the charity. Tell the charity you have named them. They can provide model bequest language, flag any issues with restricted gifts, and ensure their development team can honor your intent.

You can learn more about the full probate process — and what happens to bequests once your will is filed — in our guide to how the probate process works.

The Estate Tax Picture in 2026

The federal estate tax exemption is $15 million per person in 2026, set by the One Big Beautiful Bill Act (P.L. 119-21), which made the TCJA exemption permanent and raised it further. The top federal rate remains 40%. A married couple can shelter a combined $30 million from federal estate tax using portability.

For estates above the exemption, IRC § 2055(a) allows an unlimited charitable deduction from the gross estate. Every dollar transferred to a qualifying charity is subtracted from the taxable estate before the 40% rate applies — meaning the true cost of a $100,000 charitable bequest in a taxable estate is $60,000 after tax savings.

An important technical point: if your will or applicable state law requires estate taxes to be paid out of the charitable bequest itself, the deduction under IRC § 2055(c) is reduced by the amount of those taxes. This can create circular computation. Structure the will so taxes are paid from non-charitable assets wherever possible, and have the executor work with a CPA who understands Treasury Reg. § 20.2055-3(a).

For a deeper look at the 2026 exemption amounts and what they mean for your estate, see our 2026 estate tax exemption guide.

Does Your State Have Its Own Estate Tax?

The federal $15 million exemption doesn't shield you from state-level estate or inheritance taxes, which apply at much lower thresholds and generally allow a similar charitable deduction.

State	Estate/Inheritance Tax?	Approximate State Exemption	Charitable Deduction Available?
Oregon	Estate tax	$1 million	Yes
Massachusetts	Estate tax	$2 million	Yes
Washington	Estate tax	~$2.2 million	Yes
Illinois	Estate tax	$4 million	Yes
New York	Estate tax	~$7.16 million (2026 est.)	Yes
Maryland	Estate + inheritance tax	$5 million (estate)	Yes
California	None	N/A	N/A
Texas	None	N/A	N/A
Florida	None	N/A	N/A

State thresholds adjust annually. Verify current figures with a licensed estate attorney in your state.

If you're in a state with an estate tax well below the federal exemption — Oregon or Massachusetts, for example — a charitable bequest can eliminate state estate tax on amounts that wouldn't be touched by federal tax at all. This makes bequests significantly more valuable for mid-sized estates in those jurisdictions than the federal numbers alone would suggest.

State-specific will requirements also vary. Residents of California, New York, Texas, and Florida each face different execution requirements, witness rules, and probate procedures. If you're uncertain whether you need an attorney to formalize your wishes, our guide on whether you need a lawyer for a will walks through when professional review is worth the cost.

Common Mistakes to Avoid

• Naming the charity only in your will, not on the account form. Retirement accounts, life insurance, and bank accounts with payable-on-death designations bypass your will entirely. A will-only bequest of your IRA does nothing if your adult child is still listed as beneficiary on the account paperwork.

• Using an informal name. "The Humane Society" is ambiguous — there are hundreds. Use the full legal name plus the EIN. An imprecise description can void the bequest or trigger costly litigation.

• Making a contingent bequest and expecting a guaranteed estate tax deduction. If the IRS concludes there is more than a negligible possibility (roughly above 5%) that the charity will not receive the funds, the charitable deduction under IRC § 2055 may be denied entirely.

• Leaving a restricted bequest without coordinating with the charity first. Directing a gift to a specific program that no longer exists traps the funds in legal limbo. Speak with the charity's development office before drafting restrictions.

• Forgetting to review after major life changes. Divorce, a significant change in estate size, or a charity that merges or dissolves can make an old bequest operate in ways you never intended. Review your will every three to five years and after any major life event.

• Giving the wrong asset. As the worked example above shows, leaving a traditional IRA to your child instead of to charity — and leaving appreciated stock to charity instead of to your child — can cost your family tens of thousands of dollars compared to the optimized swap.

You can create your will online through Pactlio Wills and receive a state-specific draft that includes charitable bequest language, execution instructions, and a self-proving affidavit where available — ready for attorney review.

Sources

• IRC § 2055 – Transfers for Public, Charitable, and Religious Uses: https://www.law.cornell.edu/uscode/text/26/2055
• IRC § 1014 – Basis of Property Acquired from a Decedent: https://www.law.cornell.edu/uscode/text/26/1014
• P.L. 119-21 (One Big Beautiful Bill Act) – Estate and Gift Tax Exemption $15 Million (2026): https://www.congress.gov/crs-product/R48183
• Giving USA 2025: The Annual Report on Philanthropy for the Year 2024 (bequest giving $45.84 billion): https://givingusa.org/giving-usa-2025-u-s-charitable-giving-grew-to-592-50-billion-in-2024-lifted-by-stock-market-gains/
• NPTrust – Charitable Giving Statistics 2024: https://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/
• IRS Tax Exempt Organization Search: https://apps.irs.gov/app/eos/
• Treasury Reg. § 20.2055-1 – Deduction for Transfers for Public, Charitable, and Religious Uses: https://www.law.cornell.edu/cfr/text/26/20.2055-1
• SECURE Act (P.L. 116-94, 2019) – 10-Year Rule for Inherited IRAs: https://www.congress.gov/bill/116th-congress/house-bill/1994
• GRF CPAs – Leaving IRA Money to Charity: https://www.grfcpa.com/resource/leaving-ira-money-to-charity-a-tax-smart-strategy/
• Forbes – How Charitable Contribution Deductions Are Changed For 2026: https://www.forbes.com/sites/bobcarlson/2026/02/20/how-charitable-contribution-deductions-are-changed-for-2026/

This article is general information, not legal advice. Laws vary by jurisdiction. Pactlio generates professional drafts for review — have a licensed attorney review anything important.