If charitable giving has been an important part of your life, you may want this to continue once you are gone. There are numerous estate planning tools that account for charitable giving.
Outlined below are some legal strategies to make charitable giving a part of your legacy.
Bequests in wills or trusts
One of the simplest ways to give to charity through your estate plan is to name charities as beneficiaries in your will or trusts. You can specify an asset or precise sum of money and pass it on to your chosen charity.
Not only does this approach allow you to control what assets go to the charities of your choice, but there may be additional tax advantages. If assets are going to charity, then the taxable value of your estate may be reduced.
Beneficiary designations
Beneficiary designations are another useful way to give to charity through your estate. You can name charities as beneficiaries on your financial accounts and life insurance policies. Generally, this is done by completing a beneficiary designation form. Another added benefit of this approach is that the assets typically bypass probate and go directly to your chosen beneficiaries.
Charitable trusts
There are trusts designed specifically for charitable giving. The two most common types include:
- Charitable remainder trusts (CRTs): These allow you to give assets to beneficiaries for a set period of time, with the remaining assets going to your chosen charities.
- Charitable lead trusts (CLTs): These work the opposite way. Assets go to charities first, with the remaining assets eventually being passed onto your heirs.
The type of trust that works best for you will depend on your needs and circumstances.
There are several ways to make charitable giving a part of your legacy. Seek legal guidance to explore your options.