Unfortunately, there is a common misconception that someone must be incredibly wealthy to give back to the charities they hold near and dear to their hearts. However, this is far from the truth. Many people can give back to charities upon their passing to help support them and maintain their legacy. Unfortunately, because of this misconception, many people are unaware of how to give back. The following blog explores what you must know about Charitable Planning as part of your estate and how a Medina County, Ohio estate planning lawyer can guide you through this process to ensure your wishes are met.
What Is Charitable Planning?
Charitable Planning is an estate planning tool used to help give back to charities during their life time and upon a person’s passing. It is a philanthropic way to give back to charities and causes that represent your beliefs and ideals. Those who may not have the funds to donate during their lifetime can plan for a portion of their estate to be donated to a cause of their choosing.
It’s imperative to note that Charitable Planning does have benefits for the estate of the donor. This option provides tax relief, can help the assets going to charity avoid probate, and reduces the gift tax on your estate.
What Are My Options?
If you’re considering Charitable Planning, there are generally two options most choose. These are Charitable Lead Trusts and Charitable Remainder Trusts. Both have pros and cons, so it’s important to connect with an attorney to determine the best option for your circumstances.
A Charitable Lead Trust is a type of Trust Fund that will pay the charities of your choosing first via an income stream that lasts for a predetermined number of years. Once the organization has received the funds, your Beneficiaries will receive the remainder of the assets left. This option has significant tax benefits, as these transfers are often tax-free.
A Charitable Remainder Trust, on the other hand, works in the opposite. This essentially creates an income stream to benefit you and your Beneficiaries, and the remainder of the funds will go to the designated charity or organization. This option provides an income tax deduction, even though the charity will receive the gift at a later date.
While these are the most common choices, there are additional options you could consider, like Charitable Gift Annuities, Charitable Life Estates, and Family Foundations.
As you can see, there are many options and benefits to consider when Charitable Planning. That’s why it’s in your best interest to enlist the assistance of an experienced estate planning attorney from Krause Law to ensure you understand your options to make an informed decision. Our dedicated team can help you explore each choice so you feel confident. Contact us today to learn how we can assist you with this complex legal matter.
