In estate planning, charitable giving is a great way to support your favorite causes while reducing tax liability. However, there are also other benefits to charitable giving that could make it an excellent option for your estate.
Benefits of charitable giving include:
- Tax advantages. By lowering the taxable value of your estate, charitable giving can reduce your estate’s overall tax burden. Eventually, this will allow more of your assets to be passed onto your heirs without tax.
- With charitable giving, you decide exactly how your assets are distributed and where they go. You can tailor your giving to your estate and your unique circumstances.
- Establishing a legacy. A charitable legacy can be part of your estate planning. Giving money to causes that you support upholds your values and is a great way to establish your legacy.
If you are planning your estate, consulting with an experienced lawyer is the best way to manage your assets and create a plan to limit your tax liability. If you have any questions about estate planning or want legal advice, call our office today at 330-296-8000.
What Are the Best Strategies for Charitable Giving?
Charitable giving comes in many forms and can be incorporated into your estate planning in many ways. If you need help deciding which strategy to pick, an experienced estate planning lawyer can help you choose.
Below are some common charitable giving strategies:
Donor-advised funds, or DAFs, are becoming increasingly popular as a way to give charitably. To use a DAF, you simply contribute assets and receive an immediate tax deduction. After some time, you can recommend grants from that fund to your charities of choice.
Charitable Remainder Trusts
Charitable remainder trusts (CRT) let you put assets into a trust to be used as income for either you or your beneficiaries. When you set up a CRT, you will specify the time period that it can be used. At the end of that time period, the funds will be given to a charity of your choice.
Wills and Trusts
If you’d like to keep your estate planning simple, you can add a charity as a beneficiary to a will or trust. You can will them one particular asset, a percentage of the estate, or a specific dollar amount.
Charitable Lead Trusts
Charitable lead trusts (CLT) are similar to charitable remainder trusts. However, in a CLT, you provide income to a specific charity for a set amount of time. At the end of that time period, any assets left over are given to your heirs.
Pooled Income Funds
After you set up a pooled income fund, you release control over the fund to the charity of your choice. You can contribute assets to the funds, but the charity invests those assets. Any income is distributed to your beneficiaries, and the remaining assets are given to the charity after you pass.
What Factors Should I Consider When Choosing a Strategy?
Different charitable giving strategies have various benefits that may assist with your estate planning. When you are picking a method to use, consider your financial goals and what your objectives are. You should also look into the tax implications of each strategy to understand what kind of liability you may be encountering. Finally, it’s essential to understand the amount of control you’d like to maintain over your assets and the types of assets you’d like to donate to charity.
All of these considerations can be difficult to parse through on your own. If you are still deciding the best way to incorporate charitable giving into your estate, contact an experienced estate planning attorney today.
How Can a Lawyer Help Me With Estate Planning?
Estate planning is a complex world that requires knowledge of tax liability, asset management, and more. If you are not experienced in this area, planning charitable giving can quickly become overwhelming. With the help of an experienced attorney on your side, you can choose the right strategy for your estate using solid legal approaches.
If you’d like more information about charitable giving or have any questions about estate planning, call Weisenburger Law Offices, LLC at 330-296-8000 today.