Giving to a charity after death is one of the best ways to leave a lasting, beneficial mark on the world once you are gone. The type of estate plan best suited to your needs depends on how much you wish to leave behind for your loved ones, your total value of your assets, and what you want to leave to the charities of your choosing. A simple will may be enough, while for others setting up a trust may be the best choice.
Giving to Charities is Much More Common Today Than in Previous Generations
Adjusted for inflation and per capita, U.S. charities received three-and-a-half times as much in 2016 as they did 62 years earlier, according to Philanthropy Round Table. The biggest receivers of charity donations are within the field of religion (39 percent) followed by education (19 percent), and human services (15 percent). The bottom four categories include health (11 percent), overseas (7 percent), arts (4 percent), and nature (four percent). No matter what type of charity you plan on giving to, it is vital to talk to an attorney in order to figure out the best approach and to ensure that as much of your estate goes to the cause or causes that you care about.
Giving to a charity during your lifetime may actually be the best option in order to reduce taxes, according to Fidelity. If you are going to make a large donation to a charitable foundation, you may be eligible for itemized deductions. Donation limits do apply for contributions of appreciated securities or property on a yearly basis, though you may be able to get around this yearly limit by deducting them over the next five years. An attorney can help you decide if giving during your lifetime is the right choice, or whether adding the donations in with your estate plan is the way to go.
Avoid Probate by Creating a Revocable or Irrevocable Trust
While a will is the most simple way to achieve your goal of giving to a charitable donation after you are gone, a will must go through probate, which is the official proving of the will. Up to 15 percent of your assets may be used to fund the probate process, which can significantly reduce what you leave behind for any given charity. A charitable trust enables you to give to a charity during your lifetime or during a specified number of years, while also providing assets for your other beneficiaries. A trust can also help you reduce capital gains tax on a highly appreciated estate or stocks by giving the assets to a charitable foundation.
Call Maryland Estate Planning Attorney Tara K. Frame Today
Whether you are nearing the end of life or are simply looking for a way to make a sizeable donation during your lifetime to a charitable organization, you need to talk to a Pasadena attorney before making any decisions. We strongly advise you to speak with one of the knowledgeable estate planning lawyers with Frame & Frame as soon as you are able.