Charitable Contributions & Your Estate Plan: A Brief Guide

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Author: Paul Black

Paul’s experience as the son of two parents with big health challenges is what led him to the work he does today and gives him first-hand knowledge of the challenges that many caregivers and family members face. After graduation from GSU Law, Paul was chosen from dozens of applicants nationwide as one of three 2010-2011 Borchard Foundation Law & Aging Fellows. Paul has been named as  a SuperLawyers “Rising Star” in the area of Estate Planning and as a member of Georgia’s “Legal Elite” by Georgia Trend magazine. Published on: May 03, 2023.

Charitable Contributions & Your Estate Plan

Charitable Contributions & Your Estate Plan section

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Getting your financial affairs to provide economic security for your loved ones after you’re gone is essential. Having a sound financial plan can provide peace of mind. Estate planning gives you the power to decide who will receive your possessions once you are gone and who can make financial and medical decisions on your behalf.

Charitable giving is an integral part of estate planning in Georgia. It can help you leave a lasting legacy and impact the lives of others. People often overlook charitable giving in their estate planning or struggle to find the right way to fulfill their philanthropic hopes.

Charitable giving is an essential part of estate planning and can benefit both the donor and the recipient. The Law Office of Paul Black can help you incorporate charitable giving into your estate plan.


Benefits of Including Charitable Contributions in Your Estate Plan


The estate planning process can seem daunting at first, from sifting through beneficiary designation forms to drafting a will, appointing a healthcare proxy or power of attorney, or even establishing a trust.

Charitable giving is an essential part of estate planning and can benefit both the donor and the recipient. By including charitable contributions in your estate plan, you can ensure that your legacy will live on meaningfully. Not only will you support causes that are important to you, but you may also be able to reduce the amount of the estate tax required.

Additionally, you can use charitable giving as a way to honor someone special or recognize a milestone. With careful planning, charitable giving can be an effective tool for achieving your financial and philanthropic goals.

Charitable Deductions for Tax Purposes

Tax deductions are available for donations made to charities during a tax year, enabling donors to reduce their tax obligations. The IRS allows individuals as well as businesses to declare their donations when filing their federal tax returns. You must, however, have the proper documentation available to support your claim for these deductions.

Charitable deductions can be used to reduce the following taxes:

  • Income taxes

  • Capital gains taxes

  • State estate taxes

Additional benefits include increased tax credits, deductions for certain costs associated with donating to one or more charities, and more. Therefore, effective estate planning involves taking advantage of charitable deductions, and a skilled irrevocable trust lawyer may be able to assist you.

How to Include Charitable Giving in Your Georgia Estate Plan

You can incorporate charitable giving into your Georgia estate plan in various ways. It is important to discuss the different types of charities, how to choose the right charity, and how to ensure that your wishes are carried out after your death with your attorney.

The following methods are available for making donations in Georgia.


Naming a Charity in Your Will

Writing a will is essential to ensuring that your wishes are respected after you die. Incorporating a charity as the beneficiary of your will or living trust is one of the most straightforward ways to make charitable donations through estate planning. Additionally, this can reduce the size of your taxable estate and any resulting estate taxes.


Charitable Remainder Trust

Irrevocable charitable remainder trusts allow you to donate assets to charity and receive an annual income for life or for a specific period of time. Your tax obligations will be reduced, while you will be able to donate to the causes that mean the most to you without being taxed.

To take advantage of the benefits of charitable remainder trusts, consulting with a financial professional skilled in estate planning trusts can be helpful.


Charitable Life Insurance Rider

You could name a charity as the beneficiary in your life insurance policy. A charitable giving rider is another option. In this case, a percentage of the policy’s face value will be donated to a qualified charity. While riders on a life insurance policy will generally not lower the amount of money or death benefits payable, they do have the potential to restrict how much you can provide in gifts through this option.


Gifts of Specific Assets

Giving non-cash donations, such as real estate, can be a great way to give back while also complicating your estate planning. You can donate property such as condos, vacation homes, and ranches to charities while retaining access to it for as long as you want.


Give Appreciated Stock

Donating appreciated stock held for longer than a year can be very beneficial in terms of taxes. You won’t have to pay capital gains tax, thus saving you from additional costs.


Donation of Retirement Account

In an IRA, individuals can save for retirement with tax-free growth or on a tax-deferred basis. IRAs can be used to donate up to $100,000 to charities directly, and the amount will count toward any required minimum distributions.

Once you reach a certain age, you’re required to withdraw money from your retirement account in the form of a distribution. A benefit of having your IRA directly donate to a charity is that the donation qualifies as a Qualified Charitable Distribution (QCD). That excludes the amount from your income and even taxes on it. You could also make this charitable gift by naming the charity as the IRA beneficiary.


Lifetime Giving Through a Charitable Foundation

Community foundations provide a great way to create a lasting legacy by setting up your own charitable fund. You can make a difference with your donations and feel confident knowing your legacy will last for generations. You can choose how much and for how long you want to give while benefitting from the tax advantages.

Community foundations make it possible for both small and large donors to make the most of their gifts. These organizations can help you structure your donations for the most significant effect.

Legal Assistance With Estate Planning for Charitable Giving

The process of estate planning, especially regarding charitable giving, can be complex. You can ensure that your estate is managed and distributed according to your wishes with the help of a skilled estate planning lawyer.

An attorney can help you formulate an estate plan that meets all legal requirements while maximizing your charitable giving tax benefits. They can also assist you in navigating the various laws and regulations pertaining to charitable giving and estate planning.

You can contact The Law Office of Paul Black if you need help with your charitable bequests or if you have questions such as “how does a unitrust work?” Call us now to schedule a consultation.

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