When you are writing up your estate plan, you may have the desire to give some of your wealth to charity. Not only does charitable giving through estate planning make you feel good and make a positive impact on the world, but it can decrease your tax burden significantly. You can give to charities through the following methods:
- Setting up a charitable trust
- Naming a charity as the beneficiary of a trust or retirement account
- Establishing a private foundation
- Funding a charitable giving program
- Giving lifetime gifts
Before you decide on a giving strategy, it is crucial to determine what charity you want to support. Here are some steps to picking a charity for your estate plan.
1. Determine a cause
There are so many charities out there that support an endless number of causes, including the following:
- Hunger and nutrition
- Children and family
- Crisis services
- Economic development
- Arts and culture
While you may want to help everyone, it is important to pick a cause that is close to your heart.
2. Do your research
Once you know what cause you want to give to, it is time to find a charitable organization. You can pick something such as a local food bank, your favorite church or a well-known international organization. Be aware that some charities are dishonest, so make sure you carefully look into a charity before you lock it into your estate plan.
3. Determine your budget
Next, you will need to decide how much money you want to give. You must understand the tax implications of any amount you give. After all, charitable giving should benefit your tax situation, not the other way around.
Planning your gift-giving to charities may appear stressful at first, but all it takes is a few simple steps.