As you prepare your estate plan, you might consider leaving a portion of your savings to a beloved charity (or two, or three . . . ). Wherever your heart lies—animal rights, environmental preservation, educational outreach, medical research and services, the reduction of poverty, etc.—you are sure to find a deserving and honorable charity. So if you want to learn how to leave money to a charity in your will, read on. We can help you decide the best way to go about your good deed.
How to Leave Money to a Charity in Your Will
Learning how to leave money to a charity in your trust or will can be very confusing. There are numerous ways to leave money, but you need to choose the best method—the one with the fewest taxes and the least complications. So if you want to make a difference in the health of your favorite charity, work carefully on your estate plan with the help of an attorney and consider all of the methods below. A BEQUEST Consider using a bequest, an easy and direct way to make a charitable gift. A bequest is flexible, so you will be able to adjust the size of your gift (or even change the recipient) any time you like. You can also stipulate the money be used toward specific projects. However, if you plan to do this, you should speak with the charity beforehand to clarify your goals. In making a bequest, you will reduce the size of your estate and in doing so, reduce the amount of your money subject to taxes. However, you will also not be able to claim a tax deduction on your gift, since it will only be effective after your death.
If you’re wondering how to leave money to a charity in your trust or will, remember to consider the options that don’t include your will at all. Instead of learning how to leave money to a charity in your will, use a retirement plan or charitable trust. A RETIREMENT PLAN Instead of listing a family member or friend as your beneficiary on a retirement plan, list your favorite charity. The gift will be tax deductible and the charity won’t have to pay income tax on the gift it receives. Plus, the gift will not have to go through probate, so there won’t be any waiting time or excessive fees involved. This is a very simple, financially-smart choice. A CHARITABLE LEAD TRUST If you want to gift your favorite charity an income after your death, you can create a charitable lead trust. You will specify the length of the period during which they will receive income from the trust and when that period ends, your chosen heir(s) will receive the trust principal. This is a great choice if you’re confident in the trust’s investments. A CHARITABLE REMAINDER TRUST If you’re concerned about having a consistent income for the remainder of your life but would like to leave a large sum of money to charity, you might want to use a charitable remainder trust. To do this, you would need to set up an irrevocable trust, transfer your assets to it, and have the trust pay you income for a set period of time (or until your death). That way, you won’t be without income and the remaining money left at the end of the trust’s term (or your death) will be given to the charity.
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If you live in the southwest Missouri area and you’re wondering how to leave money to a charity in your will, give the attorneys at Parks & Jones a call. We can help you decide the best way to gift your money. Give us a call today at 417-823-9898 or click here for a free consultation.