Many people have a passion for saving animals, helping the homeless or supporting other social causes. For them, giving money to charity can be an integral part of their estate plan.
Ways to give to charities
One way you can give to a charity through your estate plan is through giving appreciated stock. Giving appreciated stocks to charity allows you to enjoy a charitable income tax deduction as well as avoid the capital gains tax you would incur if you sold the stock instead.
A second way you can give to a charity through your estate plan is through a charitable rollover. If you are age 70.5 or older, you can donate up to $100,000 annually to charities directly from an individual retirement account. This is referred to as a Qualified Charitable Distribution (QCD). With a QCD you can donate to a charity, meet your required minimum distribution (RMD) requirement, and exclude the gift from your income.
A third way you can give to a charity through your estate plan is by giving to a charity in your will or in a revocable trust. It is essential to use the correct legal name of the charity in such documents, and you must be precise about how much you are leaving to the charity. Being careful at this step will save your loved ones and the charity a lot of confusion later.
Giving to charity can be emotionally satisfying
These are not the only ways you can donate to a charity through your estate plan. Still, they are worth considering if you have a charitable cause that you are passionate about. Charitable giving can be a very satisfying part of estate planning that you can take advantage of during your lifetime.