For many people, supporting charities is an important part of their life. They prioritize donations to charities as part of their monthly and annual budgets. However, some people forget to plan for charitable giving as part of their estate plan. Because charities cannot be heirs of an estate unless they are named in a will or named as a beneficiary in a trust agreement, it is very important to discuss your charitable giving goals with your Texas estate planning lawyer. You can accomplish your charitable giving goals in several ways through your estate plan.
Options for Charitable Giving in Your Estate Plan
You can choose from several options for charitable giving when you pass away. A few of those options are:
- Donating Assets to Charity: Real estate, vehicles, art, stocks, and other assets can be donated to charity upon your death. Charities typically liquidate donated items to use the funds for the charity’s mission.
- Trust: Upon your death, you can use assets or cash to fund a trust. You can name a family member or a corporate trustee to manage the trust. The trust agreement dictates how the funds are to be disbursed to the charity.
- Charitable Gift Annuity: A Charitable Gift Annuity is funded with a lump sum gift from you to the charity. The gift is used to purchase the annuity. During your lifetime, the annuity pays a fixed percentage of the gift to you each year. Upon your death, the remaining value of the annuity is paid to the charity.
- Family Foundations: For individuals who want to donate substantial funds to a charity or charities to fund ongoing charitable work, a family foundation may be the answer. You can set up the foundation during your lifetime to receive donations that benefit various charities. Upon your death, the foundation continues to provide support for those charities.
- Life Estate Deeds: If you want to leave real estate to a charity but you need to retain the property until your death, you can transfer the property to the charity now while retaining a life estate. A life estate allows you to continue to possess and use the property until your death. Upon your death, the property is transferred to the charity.
- Charities as Beneficiaries: You can also use your retirement plans for charitable purposes. Instead of naming an individual as your beneficiary for your retirement plan, you name the charity as the beneficiary. Using a retirement account as a charitable gift can maximize your giving during your lifetime and after your death.
What is My First Step?
Your first step is to define your goals for charitable giving. Charitable giving can take many forms during your life and after your death. You need to take time to decide what charities you want to support the same charities after your death or focus your giving to one or two of the charities that are most important to you. Once you define your goals for charitable giving, your Texas estate planning lawyer can help you make sure that those goals are accomplished through your estate plan.
Contact Our Texas Estate-Planning Lawyers to Discuss Options for Charitable Giving
We want to help you develop an estate plan that addresses all your needs and goals, including your charitable donations. Contact the Law Office of Carey Thompson today to discuss your goals with a Texas estate planning lawyer.