There are plenty of ways to leave a legacy, and one of the most enduring is through charitable giving. By incorporating donations into your estate plan, your life’s work will continue after your passing, providing hope and opportunities for other people well into the future. Charitable donations can also be a way to avoid accruing burdensome taxes on your assets. If you’re interested in making charitable giving part of your legacy, there are certain considerations you’ll have to take into account. Speaking with an experienced estate planning attorney can help guide you smoothly through the process.
Charitable Giving and Taxes
While donations of assets to loved ones or other beneficiaries are subject to a gift tax, this does not generally apply to charitable donations. Still, there are certain tax considerations when it comes to charitable giving. During your lifetime, donations made to charitable organizations are eligible for a tax deduction, but there are limits to what you can write off, based on a percentage of your gross income. Checking with an estate planning professional before you make a major donation can save you from surprises down the road.
Charitable Giving, Trusts, and Taxes
When it comes to deciding how to distribute your assets after you’ve passed on, charitable giving can be a great option. In addition to using your legacy to benefit others, it also allows you to avoid taxes on your assets. The key to charitable giving is deciding what estate planning tool to use in order to carry out your vision. Setting up a charitable trust is the most common method for incorporating giving into your estate plan. A trust allows you to set aside assets that will later be distributed to your favorite charity without having to go through probate.
There are several different types of charitable trusts, the most significant of which are charitable lead trusts and charitable remainder trusts. A charitable lead trust allows you to give to one or more charities during your lifetime with the rest of the assets going to your loved ones after you’ve passed on. A charitable remainder trust allows you to generate income during your lifetime with the remaining assets passed on to the charity of your choice after you die.
Charitable giving is a great way to secure your legacy. Deciding on the right approach for your gifting and learning to navigate the tax situation can be a complicated process, but with the right legal team on your side, it can all run smoothly.
Contact Deliberato Law Center
If you’re interested in making charitable giving part of your estate plan, do not hesitate to contact the experienced attorneys at Deliberato Law Center. Give us a call at (216) 341-3413 or fill out the form below and start building your legacy today.
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