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How Can I Include Charitable Donations in My Estate Plan?

Posted on in Estate Planning

San Francisco Estate Planning LawyerDuring the estate planning process, you will make multiple types of decisions about how your money and assets will be handled both during your life and after your death. Legacy planning is an important aspect of this process, and you will want to consider how you can make sure your assets will be used to achieve your goals. If you plan to incorporate charitable giving into your estate plan, you will want to determine the best ways to provide support for causes you believe in while also protecting your family’s financial interests.

Options for Donating Assets to Charity

Charitable donations will not only allow you to support organizations that promote your values, but they can also provide tax benefits. As you work to develop a comprehensive estate plan, you may give to charity in multiple ways, including:

  • Charitable bequests - You may choose to leave certain assets to charity in your will. When doing so, you can specify that money or property may be donated to a charitable organization and used either for general purposes or to address specific needs or issues. Donating assets to charity can reduce the estate taxes that may apply following your death.

  • Account beneficiaries - A charitable organization may be named as a beneficiary of a retirement account such as a 401(k) or IRA. Any remaining funds in these accounts may be distributed to a charity or other beneficiaries following your death. While income taxes apply for withdrawals made by individuals, charities are tax-exempt, and they will not be required to pay taxes on the amounts they receive.

  • Charitable trusts - Assets may be held in a trust and distributed to one or more charitable organizations, as well as other beneficiaries. This can provide tax advantages, although to realize these benefits, a trust must usually be irrevocable. Charitable trusts generally fall into two categories. Charitable lead trusts will allow donations to be made for a certain period of time, such as the remainder of your lifetime, and after the end of that period, the remaining assets will be distributed to family members or other beneficiaries. Charitable remainder trusts will allow you or other beneficiaries to receive distributions during your lifetime, and after your death, the remaining assets may be donated to charity.

Contact Our Berkeley Legacy Planning Lawyer

If you are planning to use your assets to make charitable donations, Attorney Martin Alperen can advise you on the best ways to do so. He will work with you to create a comprehensive estate plan that will provide for your family’s needs while ensuring that you can support causes that are important to you. Contact our Oakland charitable trust attorney at 415-534-1200 to schedule a complimentary consultation today.

 

Sources:

https://www.fidelity.com/life-events/estate-planning/beneficiary-strategies/charity

https://www.cnbc.com/2020/12/22/op-ed-how-to-create-a-charitable-trust-as-part-of-an-estate-plan.html

https://www.kiplinger.com/article/retirement/t021-c032-s014-5-ways-to-include-charities-in-your-estate-plan.html

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