People who are passionate about specific causes can extend their support beyond their lifetime by donating through their estate. This thoughtful act makes certain your values live on while benefiting the organizations you hold dear. In America, there are several methods for charitable giving through an estate plan.

Bequest through a will

Writing a donation in the will is the most common method. In your will, you can designate a specific dollar amount, a percentage of your estate or even specific assets like property or valuables to a charity. Be sure to include the organization’s legal name, EIN or Federal Tax Identification Number and address for accuracy.

Charitable trust

Trusts offer more flexibility. There are two ways you can donate through a trust. A Charitable Lead Trust provides income to the charity for a set period before distributing the remaining assets to your beneficiaries. This can lower your estate tax burden. On the other hand, a Charitable Remainder Trust provides income to your beneficiaries for a set period and then distributes the remaining assets to the charity.

Beneficiary designation

Certain assets, like retirement accounts or life insurance policies, allow you to name a charity as a beneficiary. This avoids probate and ensures a smooth transfer of funds. It would also be helpful to let the charity know that you have designated them as beneficiaries and to contact the insurance provider when you pass away.

By strategically incorporating charitable donations into your estate plan, you can make a lasting impact on the causes you truly care about. You might also consider legal counsel who may guide you through legalities and ensure your wishes are documented correctly. A legal professional may also be able to help you explore options that optimize your charitable giving while considering tax implications. They may help craft a plan that aligns with your goals and maximizes your legacy.