Many people choose to be charitable during their lives, but they forget to include charity in the estate planning process. Fortunately, it is easy to remedy the situation.
A carefully crafted estate plan leaves room for charitable beneficiaries so that your generous nature is not limited to your lifetime. Here are a few creative ways to make charitable giving a part of your estate plan.
Leave Money in a Revocable Trust or Will
Perhaps the simplest way of donating to a charity after your death is through a bequest in your will or revocable trust. To leave money in a will or trust, you must state the legal name of the charity and the amount you wish to leave to them. You can also list the intended purpose of the donated funds and how you would like the charity to use the donation.
Give the Gift of Property
Not all charitable donations have to be cash. Many people elect to give property to charities, which is highly valuable. Gifting property allows you to enjoy your belongings for the remainder of your life and give them away when you no longer have use for them.
Donate Your Retirement Accounts
You can name a charity as a beneficiary of your non-Roth retirement accounts. As the donor, you have the option of giving the entire amount or a specific percentage. Because of the charity’s tax-exempt status, it can withdraw the donation without paying income taxes.
Give Your Life Insurance
Life insurance is a fundamental part of estate planning. You can designate one or more charities as the beneficiary on your life insurance policy. Your donation will be of use to a charity for general operating needs. The annual premium for the policy is deductible as a charitable contribution.
Set Up A Charitable Remainder Trust
You can benefit charity and a family member by creating a charitable remainder trust. A CRT is a split-interest trust where you grant an individual the ability to receive annual payments from the CRT for a set period. When the individual’s interest in the CRT ends, the leftover portion goes to the charity of your choice. Similarly, the grantor can set up a trust for the beneficiary’s life, and whatever remains at the beneficiary’s death will be distributed to charity. Property donated to the trust may provide you a tax deduction as well.
Donate Appreciated Stocks
If you are lucky enough to have appreciated stock, you can donate it directly to charity and avoid paying any capital gains tax. If you choose to donate your appreciated stock to charity, you will receive a charitable income tax deduction equal to the fair market value of the stock when given.
An Estate Planning Attorney Can Help You Find the Right Charitable Options
A knowledgeable lawyer from the Law Office of Ralph W. Powers, Jr. P.C., can help you determine the best ways to fulfill your charitable goals with efficiency. Contact our office now to learn more about how you can design your estate plan to remain charitable after your death.