Many people donate to charity each year, but fewer make arrangements to donate to charity as part of their estate plan. If you are interested in making a gift, whether big or small, to a charity, there are a number of ways you can support your favorite causes.
- Make gifts throughout your lifetime. While you are alive, you can support causes you believe in and make donations regularly or sporadically as you desire. Keep in mind that if you want to make a sizeable gift, you should consult with a tax professional in advance.
- Make a direct bequest in your will. The simplest way to make a charitable donation as part of your estate plan is to make a bequest to the charity (or charities) in your will. You can give a particular amount or percentage of value, particular accounts, or even items of personal property or real estate. Think outside the box – do you have personal property items that could be donated to a particular charity, either for their use or that have value for them to sell and collect the profits? Do you have an extensive collection of something that can be donated to a good cause? Leaving a gift doesn’t necessarily mean leaving cold hard cash (though, let’s be honest, charities love that too).
- Make the charity a beneficiary on your retirement assets. You can add a charity as a beneficiary on your retirement assets. When you pass away, the charity will receive the funds left in your designated retirement account(s).
- Make a split-interest gift. A split-interest gift allows you to donate to a charity, but retain some of the benefits and rights to the gift during your lifetime. There are many ways to accomplish a split-interest gift in order to maintain the income and benefits of your assets while you are alive, but then passing those assets upon your death to a charity (or even to a charity for a certain period of time and then to your heirs).
- Consider donating your organs and/or your body. Donating to charity doesn’t mean you have to donate money. You can donate your organs, tissue, bone marrow, and even your entire body, to organizations that match you with patients in need. You can also donate your body to medical research facilities for scientific study. If you want to register as an organ donor, you can do so on your driver’s license, through a state registry, and through your will. Whole body donation should be arranged in advance with a medical school or research program and be included in your will.
Planning ahead for charitable giving may allow you to maximize your estate planning and help you limit your tax liability during your lifetime and for your estate.
It is also important to keep in mind that supporting charities provides a legacy for important works that you believe in. Keeping your family and heirs informed of your plans can help them understand why you are providing support for particular causes, perhaps even encouraging them to think about supporting the charity in your honor when you are no longer able to do so yourself.
If you need assistance planning your estate and drafting the necessary documents, please reach out for legal assistance.