As you think about how you want your property and assets to be distributed upon your death, you might be thinking beyond family and friends. If there is a charitable organization that has been important to you in life, you might want to contribute to them after you are gone. There are several ways to do this and, depending on the value of your assets, it can also provide your estate with significant tax savings.
Options for Charitable Giving in an Estate Plan
The charity you want to support after your death may be one you volunteered for or enjoyed in life, such as the local animal shelter or a museum; an organization that supports research that is meaningful to you, such as the American Heart Association; or it may be an advocacy group for a cause that you believe in. Depending on the nature of the organization and the size of the gift you want to leave, an estate planning attorney can help you incorporate the best tool for supporting the group into your plan. Options include:
- Creating a bequest in your Will. The simplest and most common form of charitable giving is to name the charity in your Will and specify what you want them to get.
- Naming the organization as a beneficiary of an account. If changes made by the SECURE Act will impact your retirement savings account, naming a charitable organization as a beneficiary of an IRA or 401k plan could protect your savings from taxes so that you can do more good with your money. You can also name a charity as a beneficiary of a life insurance policy.
- Adding a charitable Trust. There are a variety of Trust options that can benefit a charity both during your lifetime and after your death. Your estate planning attorney can advise you on the best Trust to accomplish your goals.
- Life income gifts. With a Charitable Gift Annuity or a Charitable Remainder Trust, you give your money to the organization now, and they invest it and pay you annually for the rest of your life. This kind of giving can provide considerable tax advantages.
What makes the most sense for your estate will depend on how much you want to give and who you want to give it to. Your estate planning attorney and the organization you want to support will help you understand your options to maximize the value of your gift.
Ask Ross & Shoalmire, PLLC About Charitable Giving
Naming a charity in an estate plan ensures that the things that mattered to you in life will be a part of your legacy. No matter how big or how small the gift you'd like to make is, your estate planning team at Ross & Shoalmire will make it happen. We can help you build an estate plan from the ground up, or work with you to make changes to an existing plan. Contact us today to learn more about your options.