Although some people find the estate planning process to be stressful, it can really be enjoyable to figure out how you can support those you care about, even after you’re gone. Your decisions during this process can make a huge difference to those you care about, too, providing them with long-term financial stability and allowing them to enjoy life more fully.
But you don’t have to just leave your assets to the people in your life. You can also use your estate to further charitable endeavors. Whether you care about helping an environmental cause, supporting the homeless, finding a cure for specific diseases, furthering the arts or protecting animals, there’s a way to plan your estate to provide support for these causes.
Ways to support a charitable endeavor through estate planning
There are many approaches that you can take to charitable giving, many of which can be incorporated into your estate plan. Let’s look at some of the most common ways that people support their beloved causes through estate planning:
- Put a charity in your will: This is one of the most direct ways to leave assets to a charity that you want to support. By taking this approach, you can make sure that the assets you specify are left to the charity that you identify. This is an easy approach, and one that can ultimately reduce your taxable estate.
- Using your IRA: Another direct way to support your charity of choice is to name it as a beneficiary to your IRA. That way, once you pass away, the assets in your IRA will be redirected to that charity. You can also give a certain amount of money directly from your IRA to your designated charity each year while you’re still alive, which is a good way to see the charity enjoy the assets that you’ve given to it.
- Utilize a remainder trust: If you’re hesitant to leave your assets directly to a charitable organization, you might want to think about using a remainder trust. Here, you leave assets to an identified beneficiary for a specified period of time, at which point whatever is left over in the trust is given to the charity.
- Leaving property: Although a lot of people think of charitable giving as funneling cash to a charity, there are other ways to support an organization. One way to do so is to leave property to the charity. This can allow the charity to monetize the property or use it to expand its operations. In your estate plan, you can set this transfer up so that you can still use the property as you see fit while you’re still around.
- Give away appreciated stock: A lot of people have money tied up in stocks that have appreciated over time. If you sell these stocks to give money to a charity, you’re going to end up paying capital gains taxes. However, if you give away the stock to the charity, you can avoid those taxes and actually receive a tax deduction.
Know your options before you act
There are a lot of different avenues that you can take when you’re creating your estate plan. But if you want charitable giving to be a part of your plan, you need to know your options so that you can get exactly what you want out of the process. To learn more about the actions that you can take, please consider discussing your wishes with an attorney who is experienced in this area of the law.