Giving to specific organizations that are important to you is an essential part of who you are. These groups recognize your contributions of money and time and appreciate your support of their mission.
When it is time to create your estate plan, you may want to consider including a gift for one or more of your favorite organizations so they can continue the work you have supported after you pass away.
Here’s what you should know about giving to a charity through your estate plan.
Giving more than cash
While leaving money to a charity is a common way to include favorite organizations in your estate plan, there are other ways to use your assets to support charities, such as:
- Appreciated stock. Giving stocks to a charity during your life is one way to avoid the capital gains tax that comes with stock appreciation.
- Qualified Charitable Distribution (QCD). After you reach a certain age, minimum distributions from your IRA are required. You can use a QCD to benefit a charity while also fulfilling your minimum distribution requirement.
- Retirement account beneficiary. There may be significant assets in your retirement accounts when you pass away. In addition to including your loved ones as beneficiaries, you may want to consider adding a charity to the list of named beneficiaries.
These alternative options allow you to distribute assets to family and friends while considering the needs of the organizations you support.
In addition to cash and other alternatives, you can also consider donating some of your personal property to the charities you support. For example, if you participate in a hobby which requires the use of expensive equipment, you could donate the equipment to a charity that will help others enjoy the same hobby.
There are many options available for creating an estate plan that benefits your loved ones and also the organizations you support. It is essential to talk to a skilled professional about the options available through your last will and testament, and other estate planning documents.