Charitable Planning Is a Two-Way Street
Many of us find satisfaction and purpose in volunteering our time and expertise or donating to worthy causes during our lifetimes. With charitable planning, your positive impact can extend beyond your lifetime. While you consider how you’ll leave your assets to your family when you create your estate plan, you may want to consider charitable planning as well.
Charitable planning means supporting a cause you believe in or a specific charity that means something to you as part of your estate plan. And, with proper planning, you can both do good for others and create tax benefits for your estate. In this way, effective charitable planning is a two-way street.
But including charitable planning in your estate plan usually requires an experienced attorney. Charitable planning comes under the same laws that administer trusts and wills, which are both complicated and exacting. The detailed requirements must be adhered to carefully and the tax implications need to be handled precisely to ensure that the plan makes the most of your charitable contributions.
Consider these three benefits to planned giving.
1. Planned giving enables you to give more.
Gifting a taxable asset such as an IRA or 401k to a non-profit ends up being a larger gift than gifting that same asset to an individual. Gifting a taxable asset to an individual will be subject to income tax and possibly estate tax as well. With planned giving, your wealth can go farther and support a good cause!
2. Planned giving can reduce taxes.
Planned giving gives you access to many tax benefits such as reducing your income taxes, estate taxes, and capital gains taxes. You can create a charitable trust that provides an immediate income tax deduction but still allows you to use the funds. This is just one of many examples of how taxes can be minimized with planned giving.
3. Planned giving gives you peace of mind.
Many people would like to leave something to charity but aren’t sure how to do it because they also need to take care of themselves or their family. Planned giving allows you to put you and your family’s needs first and support a worthy cause.
There are basically two ways to do this. You can defer giving away your assets until specific needs are taken care of, or you can give your assets away but retain the right to use the funds they generate until you or your family no longer need them.
With planned giving, you can make a meaningful charitable gift, know that you and your loved ones will be taken care of, and take measures to minimize taxes.
Design a Charitable Giving Plan with a Virginia Attorney.
If supporting a cause or an organization as part of your estate plan is important to you, consult with Wilson Law PLC. Call (866) 603-5976 to schedule an appointment. We have the experience and know-how to make your estate plan and charitable giving plan work together for optimal impact.