Many people are interested in legacy planning because they want to control how they are remembered. Legacy planning involves providing for your loved ones when you have passed away. Legacy planning can also include giving financial support to important causes in which you believe.
If your plan for your legacy includes supporting charitable causes, there are different ways to do this. You want to maximize the value of your charitable gifts. You also want to ensure you are taking full advantage of all available tax breaks for the generous support you provide to these causes.
The legacy planning lawyers at Parman & Easterday understand the federal and state rules for charitable donations. We understand the different methods you can use to donate to charity and ensure you make the most valuable contributions possible. We will help you make inter vivos gifts (gifts during your lifetime) as well as gifts through your estate plans. Call today to learn more.
How to Make Gifts to Charities
As you begin planning your charitable gifting, you must decide if you want to make gifts during your lifetime, after your death, or both. If you provide financial gifts during your lifetime, you have more control over how the money is used. This is especially true if you make substantial charitable contributions. Providing gifts after you are gone is a way to ensure your legacy lives on through the good works you have done.
Most people do not choose one or the other. You can provide gifts while you are alive and also make contributions after your death. Your attorney can assist with both processes, including creating a comprehensive estate plan to ensure your gift is transferred to the charitable organization after your death.
Charitable Remainder Trusts
Many people making a sizable gift to charity use a charitable remainder trust, rather than simply writing a check or signing over assets to the charity.
As Fidelity Charitable explains, a charitable remainder trust is an irrevocable trust you create. The trust is funded with property you want to keep long-term that is likely to appreciate in value. When you create the trust, you name a current beneficiary of the trust, which could be you or someone else you care about. The charitable organization is the remainder beneficiary.
The current beneficiary may receive a fixed amount of money or a percentage of the value of the trust each year. This money can be for the remainder of the beneficiary’s lifetime up to 20 years. At the end of the period, the property remaining in the trust transfers to the charity.
You take an immediate tax deduction based on the value of the remainder gift going to the charity. This makes charitable remainder trusts a popular option.
Starting a Charitable Foundation
Another option for giving is to start a charitable foundation. You can fund this foundation with a charitable remainder trust and with cash contributions. You may also accept donations from others to fund your foundation.
Starting your own foundation provides control over how your charitable giving is used. Starting a foundation can be complex, but an experienced attorney can help you. The foundation you start should continue to exist and provide support to causes long after you are gone.
The foundation and the good works it does can be an important part of your legacy. It can shape how you are remembered and continue to make a positive contribution for generations to come.
Getting Help from a Legacy Planning Lawyer
A legacy planning lawyer can provide invaluable advice on the different methods of gifting. Parman & Easterday helps you maximize your charitable contributions and secure your legacy.
You can join us for a free seminar to learn more about the legacy planning services we offer. You can also call us at (405) 703-9987 or (913) 385-9400 or contact us online for personalized advice on the legal tools available to protect your legacy.
- Understanding Estate Planning – What is a Letter of Instruction? - April 2, 2020
- Do I Really Need an Estate Plan? - March 31, 2020
- Founding Attorney, Larry Parman, Shares a Personal and Insightful Message about the Coronavirus Situation and How the Firm is Handling It (click on the video below) - March 27, 2020