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What is Charitable Giving?
Charitable giving is the noble act of donating money and other assets to causes, ideas, and organizations that you are passionate about. Giving much-needed support to various charities is a way to both leave a lasting mark on the world and make a statement about your legacy and what you stand for.
We often think about estate planning as plans meant to safeguard our personal interests and look after our family members after we are gone. But charitable giving can be incorporated into your estate plan, too. Incorporating your philanthropic goals into your estate planning becomes a powerful tool for creating a long-lasting positive legacy.
For many, charitable giving is a priority for ourselves and our estate plans, as we devote a portion of our assets to support the causes and organizations that matter most to us. But making charitable donations can also have many useful benefits for the charitable giver, including ways to reduce taxes.
If you have a charity organization that is important to you, our law firm can help you find ways to incorporate your philanthropy into your estate planning. To learn more about our legal services, we encourage you to contact our law firm to schedule a consultation today.
Can You Include Charitable Giving and Philanthropic Goals in Your Arizona Estate Plan?
Yes, of course.
The first step in your estate’s charitable giving pursuits is to determine the recipient of the charitable gifts. These charitable organizations may be groups that you donate to regularly already or a new cause that is important to you and your legacy.
Many options are available to individuals who wish to incorporate their philanthropic goals into their estate planning documents. These include direct gift giving, gifting a life insurance policy to a nonprofit, charitable gift annuities, qualified charitable distributions, private foundations, and different types of trusts that can all achieve similar aims.
Our full-service law firm has experience helping clients devise useful strategies for charitable giving and estate planning. For legal assistance, please contact our law office to schedule your initial case evaluation today.
What Are the Benefits of Charitable Giving in Estate Plans?
Including charitable giving in your estate plans has two significant benefits: it allows you to accomplish your philanthropic goals while also creating substantial tax benefits for your state.
The many benefits of including charitable giving in your estate plans include the following:
- Avoiding capital gains taxes
- Bypassing the probate process
- Income tax deductions
- Reduced estate taxes
- Avoiding IRA tax consequences
How to Integrate Philanthropic Goals into Your Estate Planning?
Charitable gifts can play an important role in estate planning and wealth management. First, you must choose a cause or organization that matters to you. Find something you’re passionate about. If possible, choose more than one charitable organization so that you can do something about multiple issues that you’re concerned about.
Next, decide how much you wish to donate to charity now and into the future. What form will these donated assets take? Virtually all charitable organizations are known to accept financial assets and cash donations. However, some charities also accept artwork, securities, valuables, and even real estate property. Donating highly appreciated assets to a charity organization effectively reduces and potentially avoids certain taxes.
Finally, you must decide which estate planning methods should be used to give assets to your charities. You may opt to name a charitable organization as a beneficiary in your last will and testament. Alternatively, you may wish to distribute assets to a charitable organization via a trust. However, there are other methods to consider, too. It is possible to leave a significant amount of your life insurance policy to a charitable organization upon death. You can also name a charitable organization as the beneficiary of your retirement plan. A donor-advised fund is an account maintained by a sponsoring organization as stated by the IRS. Pooled-income funds operate similarly to mutual funds. And private family donation foundations are another option to consider.
What Are Charitable Remainder Trusts?
A charitable remainder trust is an estate planning tool that allows you to receive income for the rest of your life (or a specified term), after which the remainder of the trust will be donated to your elected charity organization. Many consider charitable remainder trusts to be a win-win for both the giver and the receiver, partly because they provide you with financial benefits while supporting your interests.
What is a Charitable Leads Trust?
Charitable leads trusts give you the opportunity to provide an income stream to a designated charity for a set number of years while preserving a portion of the underlying assets to your heirs and beneficiaries. Essentially, the charitable leads trust is the opposite of a charitable remainder trust.
What is the Value of Gift-Giving?
One effective way of leaving a lasting impact on your community is to make direct gifts to qualifying nonprofit organizations. This can also help reduce your taxable estate.
Gifting cash or other financial assets may entitle you to certain income tax deductions and reduce your estate’s size. Additionally, charitable gifts made upon your death reduce your taxable estate via an unlimited charitable deduction.
Gifting tangible assets, such as art, jewelry, valuables, and real estate, can also provide tax benefits. The amount of estate tax deduction is typically whatever the asset’s fair market value.
Schedule an In-Depth Consultation with Experienced Estate Planning Attorneys Today
Whether you would like to include charitable giving in your estate plan now or establish terms for how the charitable giving will proceed after your death, we would be proud to lend legal assistance. Our legal team has extensive experience representing clients in estate planning matters, including the complexities of charitable giving donations. To ensure you benefit from your philanthropic giving, you should work with an experienced and knowledgeable estate planning lawyer. Contact our estate planning attorneys for legal guidance today.
You may reach us at 623-253-8718.
