Older woman working on estate plan

8 Options for Charitable Giving in Your Estate Plan

When estate planning, your natural inclination may be to leave your assets entirely to your family and friends, however, you may also be considering giving some of it away to charity. After all, charitable giving is a lasting way to preserve one’s legacy and continue giving long after passing on.

If you are considering implementing charitable giving into your estate plan, here are some options.

Charitable Rollovers

You can use an existing IRA to make a charitable tax break. Currently, individuals can donate up to $100,000 to a charity directly from their IRA. Even better, the total amount donated counts toward any required minimum distributions and is considered to be a qualified charitable distribution, meaning you are able to exclude it from your income and do not have to pay taxes on it.

Non-Cash Gifts

Gifts to charity are not solely limited to cash. You can also donate non-cash assets such as real estate and vehicles. For example, you can give your house to the charity of your choice while reserving lifetime use, meaning you are free to use it for the rest of your life. After your passing, it will be gifted to the aforementioned charity.

Donating Through a Will

You are able to name a charity as a beneficiary in your will. This is referred to as a bequest. Doing so can decrease your estate taxes as well as the total amount of your taxable estate. With bequests, it is best to be as specific as possible to avoid confusion when the assets are distributed. Miscalculations could result in the charity being forced to refuse your bequest. If you are unsure how to structure your will in this manner, it is a good idea to consult with a professional estate planner.

Donating Through Life Insurance

In addition to covering your funeral and related expenses, funds from your life insurance policy can be donated to a charity so long as they are listed as beneficiaries on your policy. Current laws allow for one or more charities to be named as a beneficiary on an individual’s life insurance policy.

Donor-Advised Funds

Donor-advised funds are irrevocable gifts made to a charitable organization. Donations made in this manner are immediately eligible for state and federal income tax deductions. After the funds hit the charity’s account, the donor can manage and monitor them as needed, enabling further investment and growth potential.

Family Foundations

Family foundations are ideal for larger donations and donations you want to be paid out over a period of time. This option allows the grantor to manage the foundation and associated assets throughout their lifetime. After their passing, their family has the option of continuing the foundation. Assuming the right individuals are involved, this is a time-tested means of setting up a powerful and lasting legacy.

Avoid Scams

Unfortunately, the world of charity is also rife with scams. This is why it is important to do your research and ensure the charity you are donating to is who they say they are. If you are unsure, consult a professional for assistance.

Reach Out to a Qualified Estate Planning Professional

If you are looking to implement any of these options into your estate plan, it is best to get in touch with a qualified estate planning professional. Our team at OC Wills & Trust Attorneys has been serving the estate planning needs of Huntington Beach, Irvine, and the broader Orange County area for quite some time. We know how to simplify the process while advocating for the best results. Schedule a free consultation with us today.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.