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How Can I Include Charitable Gifts in My Estate Plan?

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For some people, supporting charities – with time and/or money – is important. If you are one of those people, you may also wish to continue your charitable gifting after you are gone. To do that, you will need to incorporate charitable gifting tools and strategies in your estate plan. To help get you started, an Essex Junction estate planning attorney at Unsworth LaPlante, PLLC explains how you can include charitable gifts in your estate plan.

Charitable Gifting and Your Legacy

If charitable gifting is part of who you are and something you believe is important, why not make it part of the legacy you hand down to your loved ones? You may not be able to continue all your charitable gifting in your estate plan; however, you can certainly incorporate enough to make it part of your legacy. Take some time to decide which recipients and/or which type of gifts are most important for you to incorporate in your estate plan.

Gifting to Charities in Your Last Will and Testament

You can make charitable gifts in your Will; however, there are several reasons why making charitable gifts in your Will is not the best option. To begin with, using your Will to make charitable gifts means you will almost surely miss out on tax benefits that would otherwise be available when making charitable gifts. In addition, when you make a direct gift in your Will, you lose all control over how that gift is used once the transfer is complete. Finally, if you hope to involve your children, or other younger relatives, in your philanthropic endeavors, you will need to use a more complex method of continuing your charity work.

Other Ways to Include Charitable Gifts in Your Estate Plan

Although your Will may not be the best way to continue gifting to charities after you are gone, there are other tools and strategies that can be incorporated into your estate plan to continue your legacy of philanthropy, such as:

  • Charitable Lead or Charitable Remainder Trust. Charitable lead and charitable remainder trusts are specialized trusts that allows you to gift to both a charitable and a non-charitable beneficiary. With a charitable lead trust (CLT) a charitable beneficiary receives distributions from the trust for a specific period first. At the end of the designated period, the remaining assets are distributed to the non-charitable beneficiary. A charitable remainder trust (CRT) works in reverse with the non-charitable beneficiary receiving distributions first and the remainder going to the charitable beneficiary.
  • Charitable Gift Annuity. In some ways a charitable gift annuity is like a trust. You donate cash, or other assets needed by the charity, in return for which you, or another beneficiary (or more than one beneficiary), receives a fixed annuity payment for a designated period.
  • Private Foundation. A private foundation is the most complex, yet most potentially rewarding, option. A private foundation is a non-profit organization that manages its own funds and can be used to make charitable gifts to numerous and varied causes. Because of the cost involved in setting up and operating a foundation, this option is only practical if you plan to donate a sizeable amount to charity in your estate plan. Along with numerous tax advantages, one of the biggest benefits to creating a private foundation is that it gives you the opportunity to involve future generations in philanthropic gifting in a hands-on manner. As the creator of the foundation, you can establish guidelines for what type of gifts will be made and what type of beneficiaries will be considered; however, your children, grandchildren, and future generations will be able to experience charitable gifting first-hand through the operation of the foundation.

Contact an Essex Junction Estate Planning Attorneys

For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about how to include charitable gifts in your estate plan, contact an experienced Essex Junction estate planning attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.

Stephen Unsworth
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