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Giving to charity through your estate plan

On Behalf of | Mar 7, 2022 | Uncategorized

Drawing up your estate plan in Indiana doesn’t need to be a nightmare. It is true that it can be a very complex and sometimes confusing process. However, with the right aid and counsel, you can quickly draw up a plan that will benefit your heirs for years to come. You can also plan to leave money to a charity.

How can you arrange a charitable contribution?

There are a number of ways that you can incorporate a charitable contribution into your estate planning. Perhaps the simplest and most direct method will be to name a specific charity as a beneficiary of your non-Roth retirement accounts. These can include an IRA, 401(k), 403(b), or others. They can receive the whole estate or a percentage.

You can also include a bequest to your favorite charity in your trust or living will. You can identify the exact amount of the donation that you leave to them. You can also specify exactly how and for what purpose you would like the money you leave to be spent.

You may also be able to leave money to a charity through the process of rollover. If you are over the age of 70 1/2, you may donate up to $100,000 per year directly from your personal IRA. Keep in mind that if you use this process, the money is considered income that is subject to taxation.

Is a charitable contribution tax deductible?

One of the main reasons why you may wish to give to charity as part of your estate plan is to enjoy tax benefits. Many states allow people who name charities as a beneficiary of their estate to gain access to several key advantages.

These benefits can include enjoying lower income taxes during your remaining years. You may also be able to enjoy a lower rate of estate taxes after you pass. It is true that tax benefits are not the only reason why you may wish to give to charity. But this is a benefit that is well worth learning more about.