Charitable Giving in Estate Plans
There are many things to consider when developing an estate plan. Most people will transfer assets to their loved ones when they pass away. However, if there is a particular charity or cause that is important to them, they may want to include a charitable gift in their plan. There are several options for charitable giving as part of an estate plan, which can be tailored to suit a person’s needs.
Any charitable organization, such as a church, school, or nonprofit, can be named as a beneficiary in an estate plan. Many people select a charity or charities with whom they already have a giving history. If not, it can be helpful to think about what inspires them, what they are passionate about, or what would have a profound impact in their community.
There are several different giving vehicles that people can take advantage of when drawing up their estate plan. The most straightforward is a cash gift bequeathed in the person’s will, but they can also designate specific assets to be transferred to the charity, such as naming them the beneficiary on their life insurance policy or transferring gifts of stock. Some, but not all, charities may be able to accept physical assets such as real estate. A charity can also be a remainder beneficiary, meaning that they will receive the remainder of the estate once all tax liabilities and other debts have been satisfied.
A person can also establish a giving vehicle while they are still living. Doing so can reduce the size of their estate before their death, relieving their heirs of some of the tax burden on their inheritance. If a person gives through a charitable lead organization, the charity will receive regular payments until the person’s death or an established cut-off date, at which time the remainder will go to them or their heirs; a charitable remainder organization works the opposite way, with regular payments going to the person or their heirs and the remainder going to charity. A donor-advised fund or private foundation can also have significant income tax benefits while allowing a person to fulfill their philanthropic goals.
Conditions of Charitable Bequests
In some cases, a gift can be given with certain conditions. Some gifts are restricted to a particular purpose, such as certain projects or certain funds within the organization. An unrestricted gift will often be converted into general operating support for the organization, paying everyday expenses such as rent, utilities, and salaries for those who keep the charity running. Gifts can be made in honor of someone, or there may be naming rights associated with the gift, such as an endowed professorship.
Each person is different, and their interests and abilities can vary greatly when it comes to charitable giving. Finding the right charity and giving vehicle can help them leave a lasting legacy while protecting their financial interests. Consulting an estate lawyer can help ensure that estate plans are structured according to the person’s wishes.
Brooklyn Elder Law Lawyers at Korsinsky & Klein, LLP Provide Comprehensive Estate Planning Services
The elder law lawyers at Korsinsky & Klein, LLP provide tailored solutions for individuals and families looking to create or modify an estate plan. We can help you fulfill your philanthropic goals while maximizing benefits for you, your heirs, and the causes you care about. With offices conveniently located in Brooklyn, Lower Manhattan, and Lakewood, New Jersey, we help clients throughout New York and New Jersey. Call us today at 212-495-8133 or contact us online to discuss your case with a Brooklyn elder law lawyer today.