Giving to charity can help define your legacy. And doing so through your estate plan can be an effective way to support a cause you believe in. While using your will to specify assets to be given to charity upon your passing is a viable option, it certainly isn’t the only one that’s available to you. In fact, you have several avenues here that can be tailored to suit your needs, perhaps while providing you with tax benefits. Let’s look at some of them here.
Your options for giving to charity through estate planning
There are several ways to give to charity through the estate planning process. Here are some of the most effective:
- A charitable lead trust that financially contributes to the charity for a specified period, at the expiration of which the funds are dispersed to a secondary beneficiary such as a loved one.
- A charitable remainder trust, where trust funds are used to support an individual, such as your spouse, with the remainder of the trust’s assets being paid to the charity upon the initial beneficiary’s death.
- Lifetime gifts that can reduce your tax obligations.
- A life insurance policy that name the charity as the payee upon your death.
- Using a charity annuity fund that still allows you to receive regular payments after providing a lump sum to the charity, with the charity retaining whatever annuity funds are left over once you pass away.
Custom tailor your estate plan to suit your needs
There are a lot of ways to approach estate planning. The beauty of the process is that you can tailor it to suit your needs. So, as you head into the process, it’s a good idea to have a clear understanding of your goals. That way, you and your attorney can effectively craft a legal strategy that best positions you to reach those goals and bring your vision of the future into reality.