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Strategic Charitable Giving in Estate Planning

Loune-Djenia Askew, Esq.

May 6, 2024

Incorporating charitable giving into your estate plan can be a powerful way to leave a lasting impact on the causes you care about. It’s not only a means to help others but can also be an important tool in reducing your taxable estate. When you direct a portion of your estate to a charity, you're ensuring that your legacy extends beyond your lifetime.

Strategic Charitable Giving in Estate Planning

Mechanisms for Charitable Contributions

There are several mechanisms through which you can include charities in your estate plan. One common method is through a bequest in your will, specifying a certain amount or percentage of your estate to go to a charitable organization. Another approach is to name a charity as a beneficiary of your retirement accounts or life insurance policies.

Establishing a Charitable Trust

For those looking to have more control over their charitable giving, establishing a charitable trust can be an effective strategy. There are two primary types of charitable trusts: a Charitable Remainder Trust (CRT) and a Charitable Lead Trust (CLT). A CRT allows you to receive income for a set period of time, with the remainder going to the charity, while a CLT lets the charity receive the income first, with the remainder passing to your beneficiaries.

Tax Benefits of Charitable Giving

Charitable contributions through your estate can offer significant tax advantages. Not only can they reduce the size of your taxable estate, potentially lowering estate taxes, but they can also provide income and gift tax benefits, depending on the structure of the donation.

Consulting with Professionals

To maximize the impact of your charitable giving, it’s important to consult with financial and legal professionals. They can help you align your philanthropic goals with the most tax-efficient methods of giving. This ensures that your generosity is felt where it’s most needed and that your estate is managed according to your wishes.

Charitable giving is a rewarding addition to any estate plan, offering both personal satisfaction and financial benefits. By carefully selecting charitable beneficiaries and the right giving vehicles, you can create a lasting legacy that speaks to your values and supports the greater good.

For more information, contact our office at Askew & Associates, P.A. by calling 954-546-2699.

Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns.

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