Estate planning is more than just distributing assets; it’s an opportunity to shape a legacy that aligns with your personal values and supports causes close to your heart. For those interested in incorporating charitable giving into their plans, there are several tailored strategies available. From charitable trusts to donor-advised funds, these options allow you to create a meaningful impact while offering potential tax benefits—and even providing income for family members.
Charitable Giving Options in Estate Planning
Here are a few ways to include charitable giving in your estate plan, each offering different benefits:
Charitable Remainder Trust (CRT)
- A CRT allows you or other beneficiaries to receive income from the trust for a set period, often for life.
- When the term ends, the remaining assets go to the charity you’ve chosen.
- CRTs can help reduce capital gains taxes if funded with appreciated assets, in addition to providing a charitable deduction.
Charitable Lead Trust (CLT)
- With a CLT, a charity receives income from the trust for a set period.
- Once that period ends, the remaining assets are passed to other beneficiaries, often family members.
- CLTs are popular for reducing estate and gift taxes, particularly if your goal is to transfer wealth to heirs.
Donor-Advised Fund (DAF)
- While not a trust, a DAF is a flexible option for charitable giving.
- You can contribute assets to a DAF and recommend grants to charities over time, giving you ongoing involvement in charitable decisions.
- DAFs also provide an immediate tax deduction and simplify the process of making donations to multiple organizations.
Key Benefits of Charitable Planning in Your Estate Plan
- Tax Benefits: Charitable trusts can reduce estate, income, and capital gains taxes, potentially helping both you and your beneficiaries.
- Legacy Building: Including charitable gifts in your plan ensures that your legacy supports the causes close to your heart.
- Income for Beneficiaries: Some trusts, such as CRTs, can provide income to you or family members while still benefiting charities.
If you’re interested in making charitable giving part of your estate plan, our experienced team of attorneys at TrustCounsel can help you design a strategy that meets your goals and maximizes the impact of your legacy. Visit our contact page to find the office closest to you, or fill out our online form, and we’ll be in touch to set up a consultation that works for you.