Incorporating charitable giving in your estate plan is a great way to meet your philanthropic goals while gaining unique financial benefits.
Benefits of Charitable Giving
Charitable giving within an estate plan allows you to support causes you care about and significantly reduce your tax burden. When you direct a portion of your estate to charity, you’ll reduce the taxable value of your estate, ultimately lowering your estate tax liability. Additionally, you may also be eligible for further income tax deductions depending on the type of donation you make.
Ways to Include Charitable Giving in Your Estate Plan
Bequests
A bequest is one of the simplest ways to incorporate charity into your estate plan by giving a dollar amount, a particular asset, or a percentage of your estate to a chosen charity as a gift.
Charitable Trusts
Creating a charitable trust lets you implement more complex giving strategies that benefit you, your heirs, and the charities you care about. A Charitable Remainder Trust (CRT) provides you or designated beneficiaries with income for life before the remainder goes to charity. On the other hand, Charitable Lead Trusts (CLTs) will let you donate a specific amount to charity for a set period, with the remaining assets eventually passing to other beneficiaries.
Donor-Advised Funds
Lastly, donor-advised funds (DAFs) let you make a charitable contribution from your estate to receive an immediate tax deduction. From there, you can recommend grants from the fund to your favorite charities over time.
Begin Planning Your Charitable Legacy
Including charitable giving in your estate plan will help you create a lasting legacy and enjoy financial benefits. If you’d like to start this process, please contact our team to schedule a free consultation today.
