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Incorporating Charitable Giving Into Your Estate Plan

December 31, 2020

People decide to give to charities for a variety of reasons, whether it’s to honor a loved one or make good use of the wealth they acquired in their lifetime. Aside from the enormous benefits a charitable giving plan can have both on the people you’re serving and on you, a charitable giving plan also minimizes your tax obligations both in life and in death. If you’re working with a Springfield trust lawyer to outline your estate plan, consider the benefits of incorporating charitable giving into your arrangements. Your attorney can review some of the significant tax benefits this can create.

Eager to learn more about incorporating charitable giving into your trust or estate plan? Take a look at some of the best ways to do so below.

Bequests Made to the Charity in Your Will or Revocable Trust

One of the easiest ways to ensure you are giving back to a charity you care deeply about is by working with your Springfield trust lawyer to name the charity in your will or revocable trust. A bequest is merely a sentence you would add to these documents that states the amount you would like to leave to the charity, along with any important details, such as how you would like it to be dispersed or whether any conditions apply. You can even ask the charity to use the funds for a specific purpose – for example, if you’d like to donate a sum to an art museum for the express purpose of acquiring a work of art by a woman of color each year, then you can be specific about that in your bequest and the museum is obligated to use those funds for that reason alone. Likewise, your gift can be given for a “general purpose,” if that’s what you prefer.

Charitable bequests in your will or estate plan are eligible for estate tax deductions and will reduce estate taxes when your estate amounts to $11.54 million. Missouri’s state exemption was recently increased from $5 million to $11 million, as well, meaning that if your estate is valued at $11 million or more, you may wish to consider implementing a charitable giving plan for your estate.

Charitable Giving Through Retirement Accounts or Appreciated Stock

Another approach for charitable giving is to name your charity of choice as the beneficiary of your 401k or IRA. At your passing, these assets will be withdrawn tax-free, which benefits both your estate and the charity in question. Similarly, if you have a stock portfolio that has appreciated significantly and you would like to minimize capital gains tax, giving the stock to a charity is a great solution to get this goal accomplished.

Ask Your Springfield Trust Lawyer About Charitable Planning

A sound charitable giving plan should be part of any estate plan valued over $11 million in the state of Missouri. Our attorneys have significant experience handling these types of transactions for high net worth clients. Contact an experienced Springfield trust lawyer today to get started.