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Heritage Tree LogoWhat Is Charitable Planning?

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You may have been fortunate enough to allocate a significant amount of assets throughout your lifetime. And you may want to grant your favorite charity with these assets upon your passing. This may especially be your case if you only have a few loved ones you wish to name as your beneficiaries, and you can still manage to offer them great inheritances. This is when charitable estate planning may become applicable. Read on to discover how charitable planning works and how one of the seasoned Butler County estate planning & probate attorneys at Heritage Elder Law & Estate Planning, LLC can help you work on a strategy.

What is charitable planning in an estate?

As the name suggests, charitable planning is an attempt to offer essential financial support to a nonprofit or charitable organization within your estate plan. Essentially, it is a way in which you may continue your role as a philanthropist even when the day comes that you are, unfortunately, no longer around.

However, you may start making such charitable donations during your lifetime. This may allow the specific nonprofit or charitable organization to reap the benefits of your gifts sooner. At the same time, this may allow you to maximize your federal income tax deductions each year. All the while, you may still retain the income that you need to support your already-established lifestyle.

What are charitable planning strategies I can adopt into my estate plan?

There are several strategies in which you may incorporate charitable planning into your estate plan. For one, there is something known as the charitable remainder trust. This type of trust may allow you to use the designated assets via an annuity payment. Then, at the end of the annuity term, the remainder of these assets may go to your desired nonprofit or charitable organization. Overall, the benefit of this trust is that it may avoid capital gains taxes on the sale.

Secondly, there is the option of a charitable lead trust. This type of trust may allow you to pay your desired nonprofit or charitable organization first and your designated beneficiaries second. Here, you may easily bypass your charitable deduction annual gross income limit, as gifts made in this trust are not included in your limit. What’s more, you may treat your payments to beneficiaries as much smaller gifts for your gift tax purposes.

This is not to mention the other charitable planning strategies at your disposal, such as a charitable gift annuity, charitable life estate, private foundation or family foundation, or donor-advised funds. For these reasons alone, you must consult with one of the competent Butler County estate planning attorneys immediately. Our team at Heritage Elder Law & Estate Planning, LLC is happy to advise you.

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