Charitable Gifting and Your Estate Plan

Coral Gables estate planning attorneys

If charitable gifting is an important part of your life, you may want to make it part of your estate plan as well.  Charitable gifting can be handled in several different ways in your estate plan. The type of beneficiary, size and complexity of the gift, and the amount of control you want to have over how the gift is used will all impact how you make charitable gifts in your estate plan. The Coral Gables estate planning attorneys at Stivers Law explain how to incorporate charitable gifting into your estate plan.

Consider Your Intended Beneficiaries

When it comes to incorporating charitable gifts in your estate plan, you need to narrow down your target beneficiaries to a select group. In addition, the type of beneficiaries you wish to include in your estate plan will be important in deciding what type of gift to make and how to incorporate that gift into your plan. For example, if your beneficiary is a political organization, a direct cash gift included in your Last Will and Testament might be sufficient. If, however, your beneficiary is a shelter for abused women, you might want to be more specific about how your gift is used. In that case, a trust might be a more appropriate vehicle for including your gift in your estate plan. A trust allows you to retain a strong degree of control over how the assets are used through the trust terms you create and the Trustee you appoint to oversee the administration of the trust.

Analyze Your Assets

A surprising number of people do not know the value and type of assets they own as well as they think they do. You may have a general idea of your net worth, but when it comes to estate planning you need to have a detailed understanding of all your assets and the current value of each asset. This is particularly important when you wish to include charitable gifts in your estate plan because your debts and obligations must be taken care of before you can start making charitable donations in your estate plan.

Gifting to Charities in Your Last Will and Testament

You can make charitable gifts in your Will; however, there are several reasons why making charitable gifts in your Will is not the best option. To begin with, using your Will to make charitable gifts means you will almost surely miss out on tax benefits that would otherwise be available when making charitable gifts. In addition, when you make a direct gift in your Will, you lose all control over how that gift is used once the transfer is complete. Finally, if you hope to involve your children, or other younger relatives, in your philanthropic endeavors, you will need to use a more complex method of continuing your charity work.

Ways to Include Charitable Gifts in Your Estate Plan

Fortunately, there are other tools and strategies that can be incorporated into your estate plan to facilitate charitable gifting, such as:

  • Charitable Lead or Charitable Remainder Trust. Charitable lead and charitable remainder trusts are specialized trusts that allow you to give to both a charitable and a non-charitable beneficiary. With a charitable lead trust (CLT) a charitable beneficiary receives distributions from the trust for a specific period first. At the end of the designated period, the remaining assets are distributed to the non-charitable beneficiary. A charitable remainder trust (CRT) works in reverse with the non-charitable beneficiary receiving distributions first and the remainder going to the charitable beneficiary.
  • Charitable Gift Annuity. In some ways, a charitable gift annuity is like a trust. You donate cash, or other assets needed by the charity, in return for which you, or another beneficiary (or more than one beneficiary), receives a fixed annuity payment for a designated period.
  • Private Foundation. A private foundation is a non-profit organization that manages its own funds and can be used to make charitable gifts to numerous and varied causes. Because of the cost involved in setting up and operating a foundation, this option is only practical if you plan to donate a sizeable amount to charity in your estate plan. Creating a private foundation also gives you the opportunity to directly involve future generations in charitable gifting.

Contact Coral Gables Estate Planning Attorneys

For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about incorporating charitable gifting into your estate plan, contact the experienced Coral Gables estate planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.

Author Bio

Justin Stivers is the founder and managing attorney of Stivers Law, an estate planning firm specializing in wills, probate, trust administration, and financial risk management services. Justin’s approach goes beyond just creating legal documents. From aligning investments with estate plans to ensuring comprehensive insurance coverage, he safeguards a client’s legacy from unforeseen circumstances. His commitment extends beyond individual transactions, fostering lifelong partnerships to provide ongoing support and guidance.

With an impressive track record, Justin is licensed by the Florida and the Tennessee State Bars. His professional portfolio boasts Series 65 registration as a Registered Investment Advisor, the Wealth Management Specialist™ designation, and a 2-15 License for Health, Life, and Annuities. His dedication to excellence has earned him positions like Board Member of the Estate Planning Council of Greater Miami, Business Eagle Member of the Florida Justice Association, and active membership in esteemed organizations like the American Academy of Estate Planning Attorneys.

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