How Do I Include Charitable Giving in My Estate Plan?

Charitable Giving, Charitable Remainder Trust, Estate Planning, Estate Tax, Tax Planning, Trusts, Wills / 401(k), Asset Protection, Charitable Donation, Estate Planning Lawyer, Estate Tax, Gift Tax, Inheritance, IRA, Split-Interest Trust, St. Petersburg, Trustee, Wills

One approach frequently employed to give to charity, is to donate at the time of your death. Including charitable giving into an estate plan, is great way to support a favorite charity.

Baltimore Voice’s recent article, “Estate planning and charitable giving,” notes that there are several ways to incorporate charitable giving into an estate plan.

Dictate giving in your will. When looking into charitable giving and estate planning, many people may start to feel intimidated by estate taxes, thinking that their family members won’t get as much of their money as they hoped. However, including a charitable contribution in your estate plan will decrease estate tax liabilities, which will help to maximize the final value of the estate for your family. Talk to an experienced estate attorney to be certain that your donations are set out correctly in your will.

Donate your retirement account. Another way to leverage your estate plan, is to designate the charity of your choice as the beneficiary of your retirement account. Note that charities are exempt from both income and estate taxes. In choosing this option, you guarantee that your favorite charity will receive 100% of the account’s value, when it’s liquidated.

A charitable trust. Charitable trusts are another way to give back through estate planning. There is what is known as a split-interest trust that lets you donate assets to a charity but retain some of the benefits of holding the assets. A split-interest trust funds a trust in the charity’s name. The person who opens one, receives a tax deduction when money is transferred into the trust. However, the donors still control the assets in the trust, and it’s passed onto the charity at the time of their death. There are several options for charitable trusts, so speak to a qualified estate planning attorney to help you choose the best one for you.

Charitable giving is a component of many estate plans. Talk to your attorney about your options and select the one that’s most beneficial to you, your family and the charities you want to support.

Reference: Baltimore Voice (January 27, 2019) “Estate planning and charitable giving”

Thinking about Giving It All Away? Here’s What You Need to Know

Charitable Giving, Charitable Remainder Trust, Estate Planning / Charitable Giving, Charities, End of Life Wishes, Estate Planning, Heirs, Legacy, St. Petersburg, Taxes, Will

There are some individuals who just aren’t interested in handing down their assets to the next generation when they die. Perhaps their children are so successful, they don’t need an inheritance. Or, according to the article “Giving your money away when you die: 10 questions to ask” from MarketWatch, they may be more interested in the kind of impact they can have on the lives of others.

If you haven’t thought about charitable giving or estate planning, these 10 questions should prompt some thought and discussion with family members:

Should you give money away now? Don’t give away money or assets you’ll need to pay your living expenses, unless you have what you need for retirement and any bumps that may come up along the way. There are no limits to the gifts you can make to a charity.

Do you have the right beneficiaries listed on retirement accounts and life insurance policies? If you want these assets to go to the right person or place, make sure the beneficiary names are correct. Note that there are rules, usually from the financial institution, about who can be a beneficiary—some require it be a person and do not permit the beneficiary to be an organization.

Who do you want making end-of-life decisions, and how much intervention do you want to prolong your life? A health care power of attorney and living will are used to express these wishes. Without these documents, your family may not know what you want. Healthcare providers won’t know and will have to make decisions based on law, and not your wishes.

Do you have a will? Many Americans do not, and it creates stress, adds costs and creates real problems for their family members. Make an appointment with an estate planning attorney to put your wishes into a will.

Are you worried about federal estate taxes? Unless you are in the 1%, your chances of having to pay federal taxes are slim to none. However, if your will was created to address federal estate taxes from back in the days when it was a problem, you may have a strategy that no longer works. This is another reason to meet with your estate planning attorney.

Does your state have estate or inheritance taxes? This is more likely to be where your heirs need to come up with the money to pay taxes on your estate. A local estate planning attorney will be able to help you make a plan, so that your heirs will have the resources to pay these costs.

Should you keep your Roth IRA for an heir? Leaving a Roth IRA for an heir, could be a generous bequest. You may also want to encourage your heirs to start and fund Roth IRAs of their own, if they have earned income. Even small sums, over time, can grow to significant wealth.

Are you giving money to reputable charities? Make sure the organizations you are supporting, while you are alive or through your will, are using resources correctly. Good online sources include GuideStar.org or CharityNavigator.org.

Could you save more on taxes? Donating appreciated assets might help lower your taxes. Donating part or all your annual Required Minimum Distributions (RMDs) can do the same, as long as you are over 70½ years old.

Does your family know what your wishes are? To avoid any turmoil when you pass, talk with family members about what you want to happen when you are gone. Make sure they know where your estate planning documents are and what you want in the way of end-of-life care. Having a conversation about your legacy and what your hopes and dreams are for family members, can be eye-opening for the younger members of the family and give you some deep satisfaction.

Reference: MarketWatch (Oct. 30, 2018) “Giving your money away when you die: 10 questions to ask”

Can I Give Real Estate to a Charity in my Estate Plan?

Charitable Remainder Trust, Estate Planning, Estate Tax, Retained Life Estate, Tax Planning, Trust / Charitable Donation, Charitable Gift Annuity, Charitable Remainder Trust, Estate Planning Lawyer, Retained Life Estate, St. Petersburg

Many nonprofits are now encouraging donors to make gifts of non-liquid assets, like cars, boats or real estate. If its thoroughly vetted and properly structured, a gift of real estate can help donors meet their financial planning and philanthropic goals, and at the same time give charities a new source of funding.

Real estate holdings account for a major part of the assets in U.S. households. However, just a small proportion of charitable contributions are land or buildings. Many individuals with real estate holdings may want to consider donating their property to charity, instead of selling the property themselves. That’s particularly true, if they want to minimize taxes or generate retirement income.

The fact that many real estate gifts are more complex and cost more for charities to process and manage than cash donations, means that it’s important to think about donating to charitable organizations that have developed a clear set of gift acceptance policies and have the necessary procedures in place to accept a gift of real estate. As a prospective donor, you should look for policy guidelines that detail the kinds of properties that will and won’t be accepted. Perhaps the charity only accepts commercial or undeveloped land.

It is also important to look for the types of estate planning tools donors are allowed to use when making these gifts. These tools can include charitable remainder trusts, charitable gift annuities and retained life estates. You should also see if there are any stipulations on the charity’s acceptance of properties that come with mortgages or other risk factors.

Once a real estate gift has been approved on a preliminary basis by a charity, the donor may then be required to provide additional information about the property. This “due diligence” phase may include a title search, assessments of the local market and environmental conditions, a professional inspection and a site visit by the organization’s representative. It is customary for the charitable organization to defray the costs of conducting these studies.

After the due diligence has been finished, and the charity has agreed to accept the gift, the donor will be notified of the results of the investigations, and of the plans for how the final transfer of the property will take place.

This type of donation can offer many advantages to donors, including generating income, deferring or lowering taxes and decreasing the expenses of property maintenance.

Be sure to consult your estate planning attorney to discuss real estate contributions to charities.

Reference: TC Palm (November 8, 2018) “Donation of real estate is nice form of charitable giving”

How Do I Include Charitable Giving in My Estate Plan?

Thinking about Giving It All Away? Here’s What You Need to Know

Can I Give Real Estate to a Charity in my Estate Plan?

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