Charitable giving and estate planning are two important aspects of financial planning that can work together to achieve a variety of goals. Charitable giving allows you to support the causes and organizations that you care about, while estate planning helps ensure that your assets are protected and that your loved ones are taken care of after you pass away.
One way to combine charitable giving and estate planning is through a charitable trust. A charitable trust is a legal arrangement in which a trustee holds and manages assets for the benefit of a charitable organization. Charitable trusts can be used for a variety of purposes, such as providing income to a charity during the grantor’s lifetime, providing a charitable income tax deduction, and reducing estate taxes.
Another way to combine charitable giving and estate planning is through a charitable lead trust. A charitable lead trust is a trust that provides income to a charity for a specific period of time, after which the assets in the trust are returned to the grantor or to other non-charitable beneficiaries. This type of trust can be used to provide a charitable income tax deduction and reduce estate taxes.
You can also include charitable gifts in your will or living trust. This allows you to specify that a specific asset or percentage of your estate be given to a particular charity or charities. This type of giving is referred to as a bequest.
Charitable giving can also be done during your lifetime by making charitable gifts to a public charity. This can be done by giving cash, securities, or other assets. Charitable gifts made during your lifetime may qualify for a charitable income tax deduction and may reduce the value of your estate for estate tax purposes.
It’s important to keep in mind that charitable giving and estate planning can have tax implications. It’s a good idea to consult with a tax professional and an estate planning attorney to ensure that your charitable gifts are structured in a tax-efficient manner and that they align with your overall estate plan.
Charitable giving and estate planning are two important aspects of financial planning that can work together to achieve a variety of goals. Charitable giving allows you to support the causes and organizations that you care about, while estate planning helps ensure that your assets are protected and that your loved ones are taken care of after you pass away.
Charitable trusts, charitable lead trusts, bequests, and charitable gifts during a lifetime are some of the ways to combine charitable giving and estate planning. Consult with a tax professional and an estate planning attorney to ensure that your charitable gifts are structured in a tax-efficient manner and that they align with your overall estate plan.
- Debunking Common Estate Planning Myths - December 2, 2023
- Why ‘I’m Too Young for Estate Planning’ is a Fallacy - November 30, 2023
- No, Writing Your Will on a Napkin Isn’t Enough - November 28, 2023
