The KISS Principle for Charitable Gifts

Charitable planning 3The most common way to leave money to a charity is with a “bequest.”

The assets of a bequest are those you promise to give away after you pass away. This requires you to create or adjust your will. However, there are other ways of leaving money to your favorite organizations.

We have all heard of making a “pledge” for a fundraiser. It’s a promise to be paid soon thereafter. You can also make a pledge that is payable-on-death. It’s simply a bill that comes due when your estate is being settled. You have the ability to revoke the pledge when you’re alive.  However, at your death, it must be paid by the executor of your estate.

Another way to leave money to a charity without changing your will is to name a charity as a beneficiary of any financial asset, like an insurance policy, an IRA or a donor-advised fund. All you need to do is complete a form that says what should happen when you die. You should retain a copy so that your executor will know where to direct the asset.

Charitable gifts paid directly from your IRA can give you some terrific tax savings—both during your life and upon your death. Ask your IRA manager to arrange for a charitable beneficiary of your IRA to maximize the tax savings. You can also make charitable IRA distributions from your Required Minimum Distributions (RMDs) to your charities, to save the taxes now. However, make sure that the money goes directly from your account to the charity.

A charitable gift annuity is similar to a special bank account that pays you or a designated beneficiary annual guaranteed lifetime income. The rates are based on your age and are typically higher than you can earn with investments. This money is given to your designated charity as a gift, with the residual remaining with the charity when you die.

Speak with an experienced estate planning attorney. He or she will help you to decide which methods are appropriate for you.

Reference: Jewish News (June 21, 2017) “Keeping it (charitable estate planning) simple”


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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.