Estate Planning and Charitable Giving — Key Points
Apr 30, 2012 / By: Charles B. Pyke Jr., Estate Planning Attorney / Category: UncategorizedIf you have made philanthropy an important aspect of your life, there is no reason not to make it an equally important part of your estate plan. A charity can be incorporated into your estate plan as a beneficiary just as a family member or loved one is, allowing you to continue to support a cause that is important to you long after death. Each estate plan is unique, and each charity has individual needs, making an in-depth consultation with your estate planning attorney an essential part of incorporating charitable giving into your estate plan. There are, however, some key point to charitable giving that apply universally.
A direct bequest in your Last Will and Testament to the charity of your choice is certainly an option; however, a trust frequently offers probate and tax advantages that a direct bequest does not and provides flexibility that cannot be offered through a direct gift.
A charitable trust can be either a living trust or a testamentary trust.
The most common charitable trusts fall into one of two main categories — remainder and lead trusts
A charitable remainder trust provides income to non-charitable beneficiaries, such as family members, for a specific period of time, or life, and then gives the remainder to a charity
A charitable lead trust provides income to a trust for a specific period of time and then gives the remainder to non-charitable beneficiaries, such as family members.
A portion of the value of assets used to fund the trust may qualify as a current deduction for income tax purposes.
The amount that passes to a charity may qualify for an estate tax deduction when you die, thereby decreasing the estate taxes due on your estate.
You may be able to avoid paying capital gains taxes on highly appreciable assets, such as real estate, that are used to fund a charitable trust.
Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.
