‘Tis the season for giving! Are you in the midst of planning your estate? Figuring out how to divide your assets after your death can feel grim, but it’s important.
Estate planning can seem morbid if you think about the distribution of your assets after you’ve passed on. But there’s one silver lining – it ensures your legacy continues and your assets are used effectively. We have just the idea for lightening up this tough task: consider including charitable giving into your estate plan!
Donations allow you to contribute to causes you’re passionate about, even after your death. You can continue to make a difference in someone’s life and make the world a better place even after you’re gone. But like most estate planning decisions, donations also have legal and tax implications which are important for you to understand.
If you’re updating your estate plan this season, we encourage you to think about incorporating charitable giving with a real estate attorney. Looking for a comprehensive guide to get you started on your legacy? The 23 Legal team shares all you need to know about naming a charity in your estate plan.
The Advantages of Incorporating Charitable Giving into Your Estate Plan
Establishing an estate plan that includes charitable giving does more than just contribute to causes you are passionate about. It comes alone with many other advantages such as:
- Your passions and preferred charities can be supported even after your death. You can continue to make a difference and contribute even after you’re gone.
- Donations are tax-deductible, which means you reduce your tax liabilities. This can help you manage estate taxes better.
- Your assets can depreciate due to taxes and legal fees. By allocating some to charity, you can effectively use your assets without them losing value.
- Wills can lead to conflicts between relatives and heirs. Having an estate plan with charitable giving included helps make your donations easier after your death.
Ways to Include Charitable Giving in Your Estate Plan
The advantages of charitable giving are numerous, and so are the ways in which you can add donations to your estate plan. Here are some ideas that we can assist with…
- Will or Bequest: You can specify in your will to contribute a certain percentage of your estate to your chosen organizations. You can choose to contribute money, assets, or any residual value gifts.
- Trusts: By setting up a trust, charitable lead trust, or charitable remainder trust, you can cater to both – your heirs and charities. Trusts are instruments that offer tax advantages as well as flexible distribution of assets.
- IRA Charitable Rollover: Set up an Individual Retirement Account (IRA) to make qualified charitable donations (QCD) directly from your account to the charity. This offers you significant tax benefits.
- Life Insurance: You can nominate your preferred charity as your life insurance policy’s beneficiary. You also have the option of transferring ownership to allow the proceeds to go to charity after your demise.
- Donor-Advised Funds: You can set up a donor-advised fund for charitable endeavors. This allows you to accumulate funds and contribute during your life. Post demise, your recommended grants are transferred from the fund to the charities of your choice.
- Real Estate: Not only cash or gifts but real estate properties can also serve as a way to make donations. You can donate a property during your lifetime, or through a will or trust.
- Qualified Personal Residence Trust (QPRT): If you set up a QPRT, you transfer your primary home or a vacation house to an irrevocable trust. You can continue to live in the home for the specified trust and make use of it. After your death, the property goes to a charity.
These are just a few options for adding charitable donations to your estate plan. The best option for you is one that meets your charitable objectives and lifestyle goals. Your real estate attorney (like Ben Weaver) can guide you through the best option that makes the most sense for your specific needs.
Are there any legal considerations or tax implications to know about?
When incorporating charitable giving in your estate plan, there are tax and legal implications to account for. A real estate attorney like the 23 Legal team can not only help you choose the best option, but also deal with all tax and legal complexities on your behalf. Could it be any easier? Get answers to the 10 most common estate planning questions here!
Legal Considerations
- Updating Your Estate Plan: You will need to update your estate plan regularly to ensure that your chosen charities and donations align with your current goals.
- Power of Attorney (POA): It is essential to nominate a reliable power of attorney (POA). Whoever you choose will be responsible for ensuring your donations are made and wishes fulfilled, especially when you’re unable to make decisions on your own.
- Setting Up a Trust: Setting up trusts is complicated legally. Ensure you have the right professionals by your side to make this process effortless for you.
- Living Will: If you have a living will, it may need to be modified to ensure it aligns with your donations and charitable giving.
Tax Implications
Including charitable donations in your estate plan can reduce your tax liabilities – through lesser estate taxable value and income tax deductions. If you choose to contribute through an IRA, you can gain tax benefits. Options like donor-advised funds or living trusts have their tax implications and you should be aware of them when updating your estate plan with your charitable intentions.
“I was referred to 23 Legal LLC by a friend who was a former client of the firm. Can’t speak highly enough about Ben and his entire staff’s professionalism, efficiency and responsiveness. You are all true credits to the real estate legal industry. Will definitely hire again for my estate planning in the near future.” – Client Testimonial
Consult Expert Estate Lawyer, Ben Weaver, of 23 Legal
Your charitable intentions are inspirational and admirable. Ben Weaver is here to make your donations easier and most beneficial for everyone involved!
Adding philanthropic contributions to your estate plan offers many personal, legal, and tax benefits. These help to not only preserve your assets’ value but also give back even more. To make the most of your estate plan when it comes to donating to charity, we suggest partnering with a legal professional well-versed with the legal implications of your estate planning decisions. That’s where the 23 Legal team comes in.
Consult with attorney Ben Weaver to create a real estate plan that meets your unique needs, objectives, and wishes. Get in touch with us today and make the most of your estate and assets.
Ready to update your estate plan? Let’s achieve your goals together!
Set yourself up for success with 23 Legal: (847) 447-6004
Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.
