If charitable gifting is part of your deeply held belief system, you likely want to continue gifting after you are gone. To do that, you need to incorporate charitable gifting into your estate plan. Not only will this allow you to continue supporting the causes that are important to you, but it can also be an opportunity to pass down your belief in the importance of philanthropy to future generations. At Amato Law, PLLC our experienced estate planning attorney can help you decide how best to include charitable gifting in your comprehensive estate plan.
Your Will May Not Be the Best Way to Make Charitable Gifts
You certainly can make charitable gifts in your Last Will and Testament; however, there are several reasons why doing so may not be the best option. Using your Will to make charitable gifts means you will miss out on tax benefits that may be available by using other methods of gifting. In addition, when you make a direct gift in your Will, you lose all control over how that gift is used by the recipient. Finally, if you also hope to pass on your legacy of philanthropy to future generations, you will need to use a more complex method of charitable gifting.
Charitable Gifting Methods
Aside from making direct gifts in your Will, there are a variety of other charitable gifting methods that can be incorporated into your estate plan. These options may provide additional benefits to you, your estate, or your loved ones. Popular ways to incorporate charitable gifting into an estate plan include:
- Establishing a Charitable Lead or Charitable Remainder Trust. Charitable Lead Trusts (CLT) and charitable remainder Trusts (CRT) are specialized Trusts that allows you to gift to both a charitable and a non-charitable beneficiary. Either the charitable or non-charitable beneficiary receives distributions from the Trust for a specific period first. At the end of the designated period, the remaining assets are distributed to the remaining beneficiary.
- Charitable Gift Annuity. With a charitable gift annuity, you donate cash (or other assets) to the charitable beneficiary. In return for that gift, you (or another beneficiary or beneficiaries), receive a fixed annuity payment for a designated period or for life. The remainder of the gift is retained by the charitable recipient. Along with immediate tax benefits, you receive a guaranteed income stream for years or for your life.
- Private Foundation. A private foundation is a non-profit organization that manages its own funds and can be used to make charitable gifts. This option is only practical if you plan to donate a sizeable amount to charity given the cost of establishing and running a foundation. Along with the tax advantages, a major benefit to creating a private foundation is that it gives you the opportunity to get future generations involved in your charitable gifting.
The estate planning attorney at Amato Law PLLC can help you incorporate charitable gifting into your estate plan. Contact our office today by calling 212-355-5255 or filling out our online contact form.
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