A wonderful way to give to charities you support, from your favorite local mission to the college that helped you gain the skills you needed to succeed in life is to leave a gift to that charity in your estate. When discussing your estate plan, you should mention your desire to give to charity and your estate attorney can help you determine the best way to accomplish this goal and minimize any negative tax impacts, and maximize the positive tax benefits, of your gift.
Designate Specific Assets
In some situations, the easiest way to give to charity might be to designate specific assets in your will as going to the charity. These are often liquid assets such as savings or bank accounts, or tax qualified accounts such as IRAs or 401(k)s. However, if appropriate, you can also give specific assets such as real or personal property to the charity. Donating a building you own to the charity or giving income-generating assets such as rental properties can also be a great way to fund organizations you believe in.
Set up a Charitable Trust
If you have a number of different assets you’d like to leave to a particular charity, setting up a charitable trust can be a good option. You set up the trust and move the assets into the trust during your lifetime. A properly set up trust can help avoid estate taxes, keep creditors from filing claims against the assets in the trust, and give you a measure of control over the assets and how they are managed. Your estate attorney can help you set up a trust and name the charity of your choice as the beneficiary of the trust.
Purchase Life Insurance
If you do not have large assets that you want to leave to charity, taking out a life insurance policy with the charity named as the beneficiary is another option. You pay into this policy during your lifetime and, upon your death, the charity receives the insurance settlement. Donating this way can allow you to leave a comparatively large bequest to charity while still giving personal assets to family. Further, it lets the charity acknowledge the gift during your lifetime.
Set up a Private Foundation
For individuals with significant assets and numerous charities to support, setting up a private foundation is an option. While these are similar to charities themselves in their operating requirements, the bulk of the funding comes from an individual or a family and that individual and family can continue to guide the operations and gifts of the foundation into the future. Many prominent philanthropists use foundations to give both during their lifetimes and after death.
Handling an estate that gives back to both loved individuals and supports your favorite causes doesn’t need to be hard. The estate team of lawyers from Dunn Law Firm can help by understanding your personal goals and giving you guidance on how best to structure your estate to reach those goals. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.