Charitable Giving Within an Estate Plan

The Woodlands Estate Planning Attorneys

Charitable giving is a way of life for many, whether it involves supporting an organization that is close to your heart, a school that put you on the path toward your achievements in life, or a cause you passionately believe in. In addition to providing emotional benefits, charitable giving allows us to reap practical benefits as well.

The options for individuals to partake in charitable giving within an estate plan are varied. This includes:

  1. Gift Annuity: The structure of an annuity gift allows the donor to make a lump sum gift to charity. The gift would be used to purchase an annuity and the donor would pay a fixed percentage of the gift annually throughout his or her lifetime. The remaining value of the annuity would be paid after the donor’s death. This option gives the donor a way to donate cash or assets while still being able to receive an income stream.
  2. Gifting Assets: Donors who own real estate or stock portfolio with a large appreciation can use this option to give assets away to charity in order to receive a tax deduction for the fair market value of the gift. The charity will be able to sell those assets without being required to pay the capital gains tax on their appreciated value.
  3. Family Foundations: This option is ideal for larger donations or donations that will be made over a longer period of time. Family foundations allow those who wish to commit a portion of their assets to charitable causes in their lifetime and have the work of the foundation continue even after death.
  4. Donor Advised Funds: DAFs are ideal for donors that want to make a large single year gift but have not yet decided what charities should benefit from the gift. Donor Advised Funds require minimal administrative costs and time compared to a Family Foundation, but they also do not provide as much control over the disposition of the funds.
  5. Charitable Trusts: Irrevocable trusts can be used to achieve similar results as a gift annuity or family foundation. Charitable trusts come in many different varieties, including Charitable Lead Annuity Trusts (CLAT), Charitable Remainder Annuity Trusts (CRAT), Charitable Lead Uni Trusts (CLUT), and Charitable Remainder Uni Trusts (CRUT).

Before deciding on any of these options, you should investigate the reputation of the charity to which you would like to donate. Doing research will help ensure your donation is being used wisely and is actually being applied to charitable purpose you want to serve.

The Woodlands & Montgomery County Attorneys

At Dossey & Jones, PLLC, we can handle all types of estate planning cases for individuals in The Woodlands, Spring, Conroe, Montgomery, Houston, and the surrounding areas. If you are considering charitable giving as part of your estate planning, we can provide expert guidance on the best option for you.

Contact us today at (281) 410-2792 for a consultation.

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