Charitable Giving and Estate Planning

An estate plan gives you control over what happens to your assets when you are gone. Those assets include anything that has financial value – such as your home, bank accounts, investments, and personal property. You decide how you want everything to be distributed among family members.

You may also want to distribute some of your assets to charitable causes. Here are some ways to do it:

Your will

Consider leaving a charitable bequest in your Last Will and Testament to donate to a charity. By naming a charity as a beneficiary, you can also reduce the amount of your taxable estate and estate taxes.

Your IRA

You can make use of a charitable tax break for IRAs by contributing a charitable rollover from your IRA. This allows you to give up to $100,000 per year to charities directly from your IRA, and the amount can count towards required minimum distributions (RMDs). Giving funds directly to charity from your IRA is a qualified charitable distribution, enabling you to exclude the amount from your income and avoid paying taxes on it.

A community foundation

Establish a charitable fund through a community foundation to create a financial legacy. You can give any amount you like to almost anyone you want for as long as you want. Community foundations can help structure gifts for maximum impact and tax benefits.

Donating property

You can donate non-cash gifts, such as real estate, to a charity to incorporate charitable giving into your estate plan. For example, you can gift your condo, vacation home, farm or ranch to a charity while continuing to use them throughout your life.

Donating stock

Donating appreciated stock is one of the easiest ways to make a gift to charity. When you donate appreciated stock held for more than one year, you can avoid paying any capital gains tax.

Setting up a trust

Consider setting up a charitable remainder trust to donate tax-free and reduce your taxable income while you're still alive. You can seek the help of a financial planner or accountant to create the trust using funds from your other accounts.

Using life insurance

Name one or more charities as a beneficiary on your life insurance policy to make a charitable gift. You can also use charitable gift riders, which pay a percentage of the policy's face value to a qualified charity. These riders may limit the amount you can gift this way but don’t reduce the cash value or death benefits of the policy.

An experienced attorney can help

When making these kinds of decisions about the future, it’s important to ensure that everything is set up just the way you want. Estate planning is not a one-size-fits-all solution. You need a lawyer who is focused on personal attention and personalized solutions. The experienced estate planning attorneys at The Law Firm of Brown & Jensen can help.

First, we’ll listen to your wishes about how you want your assets distributed. Then we’ll create an estate plan that meets your needs, and prepare all the legal documents for you.

Get started today. Contact us to schedule a consultation. We serve clients in Mesa, Tucson, Scottsdale, Chandler, Peoria, Goodyear, Payson, and Show Low.