Building charitable giving into your estate plan is a wonderful way to extend your generosity and leave a meaningful legacy.  And it’s not just for the very wealthy, says Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation.

Do you want to benefit a charitable organization or cause?  Your estate plan can provide for such organizations in a variety of ways, not only upon death, but even during your lifetime. At Geyer & Associates, we find that many of our clients are interested in doing just that, particularly once they learn that planned giving programs can be a win-win.  Not only can they benefit causes meaningful to them, our clients find, they can:

  •  receive a stream of income during their own lives
  • earn higher investment yields
  • reduce capital gains taxes
  • reduce estate taxes.

There are several different categories of charitable planning, each carrying its own special combination of “selfish” and “selfless” benefits:

1. Making an outright gift to a charity or to several charities through a will or trust can benefit the charity and possibly reduce the size of a taxable estate, potentially increasing the amount heirs receive.

2. Donating retirement plan assets to charity. When a charity is the beneficiary of an IRA or other retirement account, the money goes 100% to that charity, because charities are exempt from income and estate taxes. “Less is more”, with fewer actual dollars packing more of a charitable giving “punch”.  Meanwhile, non-qualified (non-retirement account) assets, which don’t carry such a heavy tax burden, can be left to family members.

3. Making a split-interest or “combo” gift. You want to donate assets to a charity, but you need to retain some benefits for yourself. Benefits to you might reducing capital gains tax on the assets you transfer into a charitable trust, plus an income during your retirement years.

Accomplishing practical estate planning solutions is the goal for the attorneys of Rebecca W. Geyer & Associates.  When a well-constructed estate plan leaves room for worthy causes to benefit while still protecting family members, we consider that an estate planning success story!

– by Ronnie of the Rebecca W. Geyer & Associates blog team