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Including a charity in your estate plan

On Behalf of | Oct 11, 2021 | Estate Planning

An estate plan is about more than distributing your assets to your family or friends. Your estate plan is part of your legacy.

For some, giving assets to loved ones is the central part of their estate plan. However, you may want to show your support to causes that are meaningful to you.

Here’s what you should know about giving to a charity through your estate plan.

Giving before you’re gone

As you look toward retirement and your estate plan, you may be considering your IRA and your required minimum distributions (RMD) once your turn 72. When you start receiving your RMDs from your IRA, the distributions are considered taxable income.

The benefit of giving a portion of your RMD to a charity is that it counts as a Qualified Charitable Distribution (QCD). These charitable distributions are excluded from the taxable part of your IRA distribution, lessening your tax burden.

Intentional giving

Naming a charity in your will is a simple way to give money to a charity. Still, it is essential to pay attention to how you are giving to the charity. When your will simply states to donate a certain amount to a charity, the money may go to a “general fund” rather than to the specific purpose you intend it to benefit.

Before you name a charity in your will, you should talk to a representative from the charity regarding what purposes you can name in your will. If you give money for a purpose the charity cannot fulfill, the group may find it necessary to refuse the donation.


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