Wills and Trusts
Many people find immense satisfaction in assisting others. So giving to charity through your estate plan may be something that you’re considering. Giving your wealth to charity not only benefits the organization you choose, but can also reduce how much in estate taxes have to be payable after your death. As an estate planning lawyer explains, whether you make a donation for a lifetime or include a charitable bequest in your trust or will, you can help others in need and still support your family after you have passed. For more information on how you can include charitable planning in your estate documents, read on!
For those who want to give back to charity through their estate plan, your estate and the charity itself will benefit by establishing a charitable remainder trust. The charity that you choose must be qualified to receive your donation, meaning that it has a status of tax-exempt from the IRS. The individual who donates their money is called the settlor or donor of the trust, and a trustee is the charity itself. After the donor’s passing, the trustee will distribute assets to the charity as tax-free, and the funds will not be considered part of the donor’s taxable estate.
It is not uncommon for people to incorporate gifts to religious institutions, charity, or schools within their estate plan. So whether you want to leave a portion of your estate to education, women’s health, an animal rescue, or something else, all you need to do is consult with a law firm, as the Law Group of Iowa recommends, for assistance. It will be important to make sure that your documents are legally binding and there are no issues that come up when it’s time to distribute your donation after death. You can appoint someone in your estate plan to oversee and handle the transfer from your estate to your chosen charity. What a lawyer can do is review your documents and let you know if there is anything you have forgotten to do. You can then have peace of mind it will be handled in the way you have instructed when the time comes to do so.
Examples of the types of trusts that can benefit charities include a charitable lead trust and a charitable remainder trust. With the former, portions of your trust assets are paid out to charity over time. And then after that duration of time has gone by, whatever is left over is distributed to your beneficiaries with significant tax savings or as tax-free. By comparison, with a charitable remainder trust, after it is established, an income stream goes to the trust creator or a designated beneficiary. Then upon the person’s death, the remainder of their assets are given to charity.
As you can see, there are many considerations when writing your estate plan, particularly if you want to leave behind some of your assets to a charity that means something to you. If you have further questions or concerns about this, you can meet with an estate lawyer near you.