It is easy to burn out when you are responsible for providing full-time care to an aging or disabled loved one.
We are a nation of volunteers and donors. Some give their time and expertise to charities, while others feel a responsibility to give back financially. There are different ways to give and there are still tax benefits to be gained from charitable giving.
Many wills include a provision giving a certain amount of money, equities or real property to charities, upon the decedent’s passing. However, as noted in Baltimore Voice’s recent article, “Estate planning and charitable giving,” there are several ways to incorporate charitable giving into an estate plan.
Dictate giving in your will. When looking into charitable giving and estate planning, many people may start to feel intimidated by estate taxes, thinking that their family members won’t get as much of their money as they hoped. However, including a charitable contribution in your estate plan will decrease estate tax liabilities, which will help to maximize the final value of the estate for your family. Talk to an experienced estate attorney to be certain that your donations are set out correctly in your will.
Donate your retirement account. Another way to leverage your estate plan, is to designate the charity of your choice as the beneficiary of your retirement account. Note that charities are exempt from both income and estate taxes. In choosing this option, you guarantee that your favorite charity will receive 100% of the account’s value, when it’s liquidated.
A charitable trust. Charitable trusts are another way to give back through estate planning. There is what is known as a split-interest trust that lets you donate assets to a charity but retain some of the benefits of holding the assets. A split-interest trust funds a trust in the charity’s name. The person who opens one, receives a tax deduction when money is transferred into the trust. However, the donors still control the assets in the trust, and it’s passed onto the charity at the time of their death. There are several options for charitable trusts, so speak to a qualified estate planning attorney to help you choose the best one for you.
How you make your charitable donation, depends upon your level of wealth and commitment to the organizations and causes that have meaning to you. An experienced estate planning attorney will be able to create a plan for giving that complements your legacy and creates tax benefits for you and your heirs.