Many people fail to include charitable giving in their estate plans. It may be due to not fully understanding their net worth or not knowing their legacy goals. If you are philanthropically inclined, there are several ways you can incorporate charitable giving in your estate plan.
Bequest in Your Will.
Designate an amount that will go to a charity in your will or trust. Simply including terms in your will or trust that list a charity as a beneficiary is the easiest way to include charitable giving in your estate plan. You choose the amount and the charity. It may have an added benefit of lowering your taxable estate.
Rollover Your IRA to Charity.
You can name a charity as the beneficiary of your IRA and still receive tax advantages for that now. You can donate up to $100,000 per year to your charity of choice straight from your IRA and that amount is counted toward any required minimum distributions. Giving the funds directly from the IRA to the charity makes it a qualified charitable distribution (QCD) and you can exclude that amount from your taxable income.
Gift Property.
You can gift real estate, such as a vacation property, to a charity and still reserve lifetime use.
Create a Charitable Remainder Trust.
A charitable remainder trust (CRT) is an irrevocable trust that generates a potential income stream for you, as the donor to the CRT, or other beneficiaries, with the remainder of the donated assets going to your favorite charity or charities. This allows you to make donations tax-free and reduce your taxable income.
Life Insurance.
Many people are not aware that charities can be named as beneficiaries of life insurance policies. You can also establish a charitable giving rider. They pay a percentage of the policy’s face value to a qualified charity. The riders do not reduce the cash value or the death benefits of the policy, although there are limitations on how much can be given.
For more information on adding charitable giving to your estate plan, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
