Have you ever wondered if your estate plan could do more than just provide for loved ones? For some, it’s also an opportunity to make a lasting impact for the causes they care about most.
When it comes to charitable giving in your estate plan, at Linville Estate Law we begin by understanding your priorities. Not everyone is charitably inclined, and that’s perfectly okay. Many families prefer to keep their legacy within the family, which is a completely valid decision.
For those who do feel connected to a cause or organization, estate planning offers meaningful and tax-smart ways to give back. Below, we explore the most common approaches, questions, and strategies for weaving charitable giving into your plan.
Simple Ways to Include Charities in Your Estate Plan
For those that do want to provide for charities in their plans, there are a number of ways that can be provided for. The most common approach being an outright cash distribution to the charity. Alternatively, there are other tax efficient outcomes by leaving certain assets (like IRA or other retirement accounts) that would otherwise come with large tax bills to charities, which are tax exempt. This option ensures that more of your hard earned resources go to your intended beneficiary, not the government.
Common Questions About Charitable Gifts
- Can I leave money to a charity in my will or trust?
Yes. Charities can be named just like any other beneficiary, with clear instructions on what you wish to give. - Do I have to choose only one charity?
Not at all. Many clients divide their gifts among several organizations or establish a charitable fund or foundation to carry out their giving over time. - Can I give during my lifetime instead of waiting until I pass away?
Absolutely. Lifetime giving allows you to see the impact of your generosity, while also setting up future gifts through your estate plan.
“Estate planning can be taskful, emotional, and challenging. The lawyers and staff at Linville were all so very professional and helped us feel relaxed and comfortable throughout the process… It is a feeling of confidence knowing we have someone to help guide us through to the end to properly distribute and protect all we have worked so hard for through our years.” –Mariette
The Tax Benefits of Charitable Giving
Charitable giving can offer significant tax advantages.
- During life: Donations to qualified nonprofits may be deductible against income taxes.
- At death: Gifts through your estate can reduce potential estate taxes by lowering your taxable estate value.
While most Tennesseans aren’t subject to federal estate tax due to current exemption levels, charitable strategies can still help maximize impact and minimize income or capital gains taxes.
Strategies to Consider
Here are several ways to make charitable giving part of your estate plan:
- Specific Bequests: Simple and direct gifts made through your will or trust.
- Beneficiary Designations: Naming a charity on retirement or insurance accounts.
- Charitable Remainder Trusts (CRTs): Provide income for you or your loved ones during life, with the remainder benefiting charity.
- Donor-Advised Funds (DAFs): Offer flexibility to give over time and involve family in philanthropic decisions.
- Gifting Appreciated Assets: Donating stock, real estate, or other appreciated property can avoid capital gains taxes while supporting your cause.
Giving That Reflects You
Estate planning is a generous act of love, it is a way to provide for who and what matters most to you with all that you worked hard to build. How you choose to give back through your estate plan is a reflection of your priorities, and can allow your legacy to continue for generations to come.
If you have not created an estate plan yet, click here to schedule a FREE discovery call today and find out how you can protect and provide for what matters most to you.
“We are so happy with the two attorneys we dealt with at Linville Estate Law. They made our estate planning easy. I would recommend them to anyone looking to get their estate affairs in order. We have worked with other attorneys that just push you through. This group is truly different.” -Renee
