People in the Brandon, Mississippi area are a generous bunch. When our neighbors need help, we lend a hand, and we are not shy about opening our wallets for a good cause. It is therefore no surprise that many of Palmer & Slay’s estate planning clients want to include some sort of charitable gift in their estate plans.
Ways To Include A Charitable Gift In Your Estate Plan
There are several ways to include a charitable gift in your estate plan:
- A note in your will indicating that you want to leave $X to Charity ABC will do the trick.
- If you don’t have a specific dollar amount in mind, you can specify that a certain percentage of your estate go to Charity ABC.
- You could also leave the residual of your estate to charity. Specific bequests would go to everyone named in your will, and whatever is left over would go to the charity of your choosing.
- When we draft a specific bequest in a will we always ask if there is a back-up person the money should go to if the person or organization named has already passed away or closed. Naming a charity as the backup is a lovely way to honor someone who can no longer accept the gift.
- Just as you can name a spouse or other loved one as the beneficiary of your IRA, 401(k), or life insurance policy, you can also designate a charity as your beneficiary.
These are just a few of the common ways people make charitable donations in their estate plans. Palmer & Slay’s experienced team of estate planning attorneys are happy to assist creative donors who think of other ways to share their generous gifts.
When Minimizing Your Tax Burden Is A Top Consideration
If you have a sizable estate that will be subject to estate or inheritance taxes, you may want to take your charitable giving a step further. A charitable remainder trust is an irrevocable trust that allows you to donate a significant sum to charity while collecting annual income from the assets in the trust during your lifetime or for a predetermined number of years.
There are several benefits to setting up a charitable remainder trust:
- They generate a predictable cash flow that can supplement your current income.
- You may be entitled to a substantial federal income tax deduction when you create and fund a charitable remainder trust.
- Appreciated assets that are placed into a charitable remainder trust are not subject to capital gains tax.
- Illiquid or low-earning assets transferred to the trust may be converted to higher yield assets by the trust management company.
- Professional management of the trust takes the burden of caring for assets off your hands.
- Reducing the property in your estate subject to estate taxes allows you to preserve your hard earned wealth.
- Litigious loved ones are sometimes less likely to challenge the validity of a charitable gift made through a charitable remainder trust.
Preserving Your Wealth. Protecting Your Loved Ones.
The Palmer & Slay team is proud of the work we do to help our clients further their philanthropic goals. We love working with people who have a generous spirit, and a desire to give back no matter the size of their estate.
If you are ready to craft an estate plan that includes charitable gifts, we are ready to work with you. Please contact us today to schedule an initial consultation.