While estate planning largely revolves around providing for your loved ones, there is much more to it. If charitable giving has been a significant part of your life, then you may want it to be a part of your legacy.
There are several ways that you can give to charity via your estate. Here are some charitable giving strategies that you may want to consider.
Charitable trusts
There are several different types of trusts for charitable giving, but charitable remainder trusts and charitable lead trusts are two of the most popular. Charitable remainder trusts allow your beneficiaries to receive an income for a set period, with the remaining assets going to charity. Charitable lead trusts work the other way around, with assets going to charity first and then the remainder is dispersed among your beneficiaries.
Donor-advised funds
Donor-advised funds are another useful strategy for charitable giving. These funds allow you to make tax-deductible contributions to charities. They can be set up to make contributions over time, which means charitable giving remains a part of your legacy after your passing.
Naming charities as beneficiaries
One of the most simple ways to incorporate charitable giving into your estate plan is to name charities as beneficiaries in your will or living trust. This means that charities can directly receive money, real estate or other assets upon your passing.
Charitable giving in your estate plan can have several advantages. Not only can you leave behind a philanthropic legacy, but you could reduce estate taxes for your loved ones. To examine your options in more detail, you may find it helpful to seek legal guidance.