Charitable Giving in Estate Planning

Charitable giving in estate planning is a way to support charitable organizations or causes through your estate plan. This can be done by leaving a bequest in your will, naming a charity as a beneficiary in your retirement accounts or life insurance policies, or creating a charitable trust.

Charitable giving in estate planning allows you to leave a legacy of giving and support causes that are important to you. It can also provide tax benefits, such as reducing estate and income taxes, and can help with estate planning by reducing the size of your taxable estate.

There are several ways to give to charity in estate planning, including:

• Leaving a bequest in your will
• Naming a charity as a beneficiary in your retirement accounts or life insurance policies
• Creating a charitable trust
• Establishing a donor-advised fund
• Giving appreciated assets, such as stocks or real estate, directly to charity

A charitable trust is a type of trust that allows you to support a charity or cause while also providing benefits to yourself or your family. There are two main types of charitable trusts: charitable remainder trusts and charitable lead trusts. In a charitable remainder trust, you receive income from the trust during your lifetime, with the remaining assets going to charity upon your death. In a charitable lead trust, the charity receives income from the trust during a specified period of time, with the remaining assets going to your beneficiaries upon the trust’s termination.

Charitable giving in estate planning can provide tax benefits, such as reducing estate and income taxes. For example, if you leave a bequest to charity in your will, the value of that bequest is deducted from your taxable estate, reducing the amount of estate tax owed. If you donate appreciated assets, such as stocks or real estate, directly to charity, you can avoid paying capital gains tax on the appreciation and also receive an income tax deduction for the full value of the assets donated.