Charitable Bequests: Knowing Who To Donate To and How To Make Your Donation
Many of us have causes and charities to which we contribute both time and money on a regular basis. Without the regular weekly, monthly, or yearly donations of patrons such as yourself, many organizations that serve the needy, protect the environment, enliven the arts and encourage positive change for others would simply go out of business, resulting in a void that may never be filled. As part of estate planning, charitable bequests ensure these groups receive your support, both now and for generations into the future. There are several options to choose from in terms of making a charitable bequest to your favorite organization, as well as numerous charities that are worthy of your consideration.
Making a Charitable Donation Through A Will or Trust
A 2015 CNBC report on charitable bequests outlines how providing for a worthy charity through your estate plan can benefit you in the long run, while appeasing your desire to be a philanthropist at the same time. CNBC surveys indicate that as many as 40 percent of people with assets totaling $1 million or more anticipate donating between one and ten percent of their total wealth to non-profit groups to after they have passed, in addition to the ongoing support they provide over the course of their life span. In terms of how you donate, there are several options, depending on the total amount of the assets you possess, as well as your giving goals:
Donating Through Your Will
Regardless of your total amount of assets, making donations through your will is one of the easiest and least expensive options in terms of making a bequest to a charity. By leaving a specific dollar amount or percentage of your estate to a non-profit in your will, you can ensure your beneficiaries are provided for, while also taking advantage of the tax benefits associated with charitable giving. Whatever amount you donate is excluded from your taxable assets, resulting in less estate taxes for your loved ones.
Donating Through a Charitable Trust
Donors can put cash or other high appreciation assets, such as stocks or real estate, into a charitable trust, reducing their yearly income for tax purposes through a charitable tax deduction and reducing capital gains tax on the sale of any property in the trust, while also ensuring their favorite cause is provided for in the future. In addition to these benefits, a charitable trust can also provide a steady income base throughout your retirement by paying you a fixed percentage rate based on the donated assets. Once the trust term is up, the remaining assets go directly to the charity.
Deciding On A Worthy Charity
Deciding on the right charity to donate to is an important part of making a charitable bequest. Charity Navigator provides a useful guide, using an impartial rating system based on how a particular charity is operated, as well as what portions of donations go directly to helping others, versus the amount spent in administrative costs and salaries. Charity Navigator provides information on organizations through a broad range of categories, as well as providing a donor advisory list, detailing organizations operating under questionable practices.
Reach Out to Us for Professional Assistance
If you are considering a charitable bequest or need assistance in establishing a solid estate plan, contact Cavallo & Cavallo today. Our experienced New York estate planning attorneys provide knowledgeable, trusted legal representation to help ensure your assets and interests are protected, both now and in the future.