Your estate plan allows you to provide a meaningful financial legacy for your family and loved ones, even after you die. It can also be a vehicle for supporting the causes that matter to you—whether that means a favorite charity, a college, or the church you attend.
As you consider ways to incorporate charitable giving into your estate planning, it’s important to meet with an attorney, who can advise you on the best strategies for minimizing your tax burden—leaving you with more money to devote to those causes and organizations.
There are a few different ways to pursue charitable giving as part of an estate plan. One thing to ask your estate planning lawyer about is donor-advised funds. These are essentially savings accounts that you earmark for charity; you can make contributions to the fund, reap an immediate tax advantage, and advise those funds to be distributed to the charity of your choice, either during your lifetime or upon your death.
A more robust option, allowing you even greater freedom to accumulate and disseminate funds, is to start a private foundation—but be advised that this option will require a fair amount of administration. Ask your lawyer about specifics.
Also be aware that the funds in your retirement account—including a 401K or an IRA—can be directed to the charity of your choice, upon your death. From a tax perspective, this is more beneficial than donating those retirement funds while you are still alive. This approach maximizes the money you have to give to charity, as well as the funds left for your family.
As you consider the options available to you, make sure you have the right strategy in place. To develop your charitable giving approach, reach out to Singh Law Firm’s estate planning attorney today.