“Charitable giving comes in many forms. Some people donate annually to their favorite charities, while others may volunteer their time or professional services. One way many people choose to give to charity, is to donate at the time of their death. Including charitable giving into an estate plan, is a wonderful way to support a favorite cause.”
When looking into charitable giving, it can easily become overwhelming with all of the references to tax codes, regulations and forms. Talk to an experienced estate planning attorney to make this a simple part of your estate planning.
The Press & Guide’s recent article, “Estate planning and charitable giving,” explains that there are a number of ways to incorporate charitable giving into an estate plan. It is something that almost anyone can do. Let’s look at some common ways to give:
Giving in your will. When hearing about charitable giving and estate planning, many people may get intimidated by estate taxes. They think their heirs will not get as much of their money, as they wanted. However, including a charitable contribution in your estate plan will reduce your estate tax liabilities—helping to maximize the final value of your estate for your heirs. Talk to your estate attorney and ensure that your donation is detailed properly in your will.
Donating your retirement account. You can name a charity as the beneficiary on your retirement account. Charities are exempt from both income and estate taxes, so going this route means the charity will receive 100% of the account’s value, when it’s liquidated.
Creating a charitable trust. A charitable trust is another way to give back through estate planning. You can ask your attorney about a split-interest trust that allows a person to donate their assets to a charity but keep some of the benefits of holding those assets. A split-interest trust funds a trust in the charity’s name. Those who open one, get a tax deduction any time money is transferred into the trust. However, the donors still control the assets in the trust, which is passed to the charity at the time of their deaths.
Charitable giving is an important component of many people’s estate plan. There are several options for charitable trusts, so speak to an experienced estate planning attorney to help you select the best one for you, your family and the charities you want to support.
Reference: (Southgate MI) Press & Guide (January 27, 2019) “Estate planning and charitable giving”