If you would like to make charitable giving part of your estate plan, you have many options. Not only does charitable giving help organizations and people in need, it also can benefit you and your estate.
Options for Charitable Giving
Depending on how much money you have to give, which organizations you want to give it to, and your timeframe for giving, you can choose from among several different types of estate planning structures. For example, you could set up a charitable trust, start a foundation, contribute to a donor-advised fund, or give directly.
There are two basic types of charitable trusts: ones that give to family now and charity later, or ones that give to charity now and family later. In either case, interest or dividends from trust assets goes to the current beneficiaries during your lifetime. After you die or after a set term of years, the remainder beneficiaries receive the rest of the trust assets.
Some people with substantial assets to give to charity decide to start foundations. Foundations operate for the benefit of a charity, a group of charities, or a certain cause. Once a donor leaves assets to a foundation, they are no longer in his or her estate or under his or her control. Instead, a board of directors and staff decide how to use the funds.
Similar to a foundation, a donor-advised fund allows you to benefit charities of your choice by giving assets to a managed fund. The assets get invested, earning interest and dividends. At set points in time, the fund makes gifts to the charities that you chose. While you do not have control over the assets, you do control which charities ultimately receive them.
Many people choose to simply make direct gifts of money or assets to charitable organizations or non-profits. You may receive tax deductions for these charitable gifts in the years that you make them. In addition, the gifts reduce the value of your taxable estate.
Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.