Making a gift to a charity in your estate plan is a wonderful way to give back. Today’s blog post will talk about the basics of charitable giving.
Before you leave money to any charity, it is wise to go to a website like https://www.charitynavigator.org/ and https://www.consumerreports.org/charities/best-charities-for-your-donations/ to make sure that the charity is worthy of your support. Unfortunately, there are many great sounding charities that spend most of their operating costs on administrative expenses or are scams.
How to Make the Gift
A gift to a charity can be made in a Will, a Trust or through a beneficiary designation on a financial account. If you already have a Will or Trust, a charitable bequest can be added by means of a codicil to a Will or an amendment to a trust.
Tax deferred accounts, like Traditional IRA’s, 401(k)’s, annuities can be a particularly great vehicle to benefit a charity for a few reasons. Neither you, your estate or the charity will need to pay income taxes on the asset. In addition, your estate will be able to claim the bequest as a tax deduction for income tax purposes. If you only want to give a portion of an account to a charity, you can leave a portion to loved ones and a portion to a charity. Hence, it isn’t all or nothing.
Prior to making any gift, it is important to know the correct name of the organization to ensure that the money goes to its intended beneficiary and to avoid confusion.
Making the Gift Through a Will or Trust
If the gift is made in a Will or Trust, it can be done in a number of different ways.
For more information on incorporating Charitable Bequests into your estate plan, contact a Cleveland Estate Planning Lawyer.