When you’re planning your estate, one of the most meaningful decisions you can make is to include charitable giving. It’s a way to leave a legacy that supports causes close to your heart while ensuring your financial wishes are met after your passing. However, the process of creating a will or trust can be confusing and overwhelming, especially when considering how to structure charitable donations. If you’re feeling uncertain about how to include charitable giving in your estate plan, rest assured you’re not alone. Many people share these same feelings, and it’s completely normal to be unsure of where to start.
In this guide, we’ll walk you through the essential steps for incorporating charitable giving into your estate plan. We understand that this is a significant decision, and we’re here to help guide you through the process, ensuring you feel confident about your choices. At, Cole, Sorrentino, Hurley, Hewner & Gambino, P.C , we are here to guide you through the legal process and help you navigate the complexities of your case.
Richard H. Cole
Partner
Thomas F. Hewner
Partner
Donna L. Haslinger
Partner
Vivian P. Roche'
Partner
Keith R. Rosso
Attorney
Tasha D. Frazie
Attorney
Why Charitable Giving Should Be Part of Your Estate Plan
Charitable giving is a powerful tool. It not only benefits the causes you care about but can also provide financial benefits to your estate. For example, charitable donations may reduce the taxable value of your estate, potentially lowering estate taxes. Including charities in your estate plan also ensures that your philanthropic goals are met after you pass, and it can bring comfort to your family, knowing that your legacy includes giving to others.
Many people feel that charitable giving is an important part of their estate planning because it allows them to support their community and causes they are passionate about. Whether yo
u have a particular organization in mind or want to support a cause in general, incorporating charitable gifts can make a lasting impact.
Different Ways to Include Charitable Giving
There are several ways you can include charitable giving in your estate plan. Each method has its own benefits, and the right choice depends on your personal goals and financial situation. Some of the most common methods are bequests, charitable trusts, and donor-advised funds.
A bequest is the most straightforward way to leave a charitable gift in your will or trust. It is a specific gift made through your estate planning documents, where you designate a certain amount of money, property, or assets to go to a charity after your death. Bequests can be set up for general purposes or designated for specific projects or programs that are important to you.
Charitable trusts allow you to leave a donation while retaining income from the assets during your lifetime. There are two main types of charitable trusts: charitable remainder trusts (CRT) and charitable lead trusts (CLT). A CRT provides income to you or your beneficiaries for a set period of time, after which the remaining funds go to the charity. A CLT, on the other hand, directs income to the charity during your lifetime, and the remainder goes to your beneficiaries when the trust ends. These options can be beneficial for those who want to make significant charitable contributions but still require income from their assets.
Donor-advised funds (DAFs) are another option for charitable giving. These funds allow you to contribute money or assets to a charitable organization, which can then be distributed to other charities of your choice. A DAF provides flexibility, as it allows you to manage the fund during your lifetime and decide how to allocate donations to various charities. This can be especially appealing if you want to continue supporting causes over time but also want the option to change your charitable giving as your priorities evolve.
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Important Considerations Before Making Charitable Gifts
Before you incorporate charitable giving into your estate plan, there are a few important considerations to keep in mind. The first is the tax implications. Charitable donations can reduce the overall taxable value of your estate, which may help minimize estate taxes. However, the exact impact will depend on the value of your estate and the size of your donations.
Another consideration is how your charitable giving will affect your family and beneficiaries. It’s essential to strike a balance between supporting your loved ones and leaving a charitable legacy. You may want to discuss your intentions with your family to avoid any confusion or conflict after your death. By including charitable giving in your estate plan, you can be sure that your family understands your wishes and that there are no surprises when the time comes.
You should also consider the timing of your charitable giving. While some people choose to leave charitable donations after their passing, others prefer to give during their lifetime. There are advantages to both approaches. Giving during your lifetime can provide immediate benefits to the charity and may also allow you to witness the impact of your contribution. However, making charitable gifts through your estate allows you to retain control of your assets during your lifetime while still ensuring that your wishes are carried out after your passing.
How an Estate Planning Lawyer Can Help
Planning your estate and including charitable gifts can be complicated, but an experienced estate planning lawyer can help. They can guide you through the process, ensuring that your wishes are clearly stated and legally binding. An attorney can also help you understand the tax implications of your charitable gifts and suggest strategies to maximize the benefits for both you and the charity.
In addition to helping you create the necessary legal documents, an estate planning lawyer can work with you to ensure that your charitable giving aligns with your overall financial goals. They can also help you navigate any potential challenges that may arise, such as disagreements between family members or changes in your financial circumstances. By working with a professional, you can ensure that your estate plan is well-rounded and that your charitable giving is handled in the most effective way possible.
Creating an estate plan that includes charitable giving is a meaningful way to leave a legacy that supports the causes that matter most to you. Whether you are interested in making a bequest, setting up a charitable trust, or contributing through a donor-advised fund, the process can be overwhelming without the right guidance. At Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., we are committed to helping you navigate the complexities of estate planning. Our team is ready to assist you with creating an estate plan that reflects your values and ensures your charitable giving is done in the most effective way possible. Contact us today to learn more about how we can help you with your estate planning needs.