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How may I include my values and philanthropy in an estate plan?

On Behalf of | May 27, 2021 | estate planning | 0 comments

Your legacy includes non-financial assets such as personal values, beliefs and skills developed during your lifetime. If you wish for your estate to continue carrying out your mission, you may include philanthropy in your will or trust.

As noted by Kiplinger’s Personal Finance, charitable gifts or transfers at death may reduce your estate’s tax liability. By including a written bequest in your will or trust, you may name charities as beneficiaries and state which of your assets can transfer to them.

Which assets may I leave to a charitable organization?

You may generally leave charities assets of any type, which may include cash, financial instruments and real estate. Normally, if you sell stocks that have appreciated in value, you may incur a capital gains tax. Gifting stocks to a charitable organization, however, may provide a tax deduction worth the security’s market value at the time of transfer.

As an additional method of reducing estate taxes, some individuals name an organization as the beneficiary of an Individual Retirement Account or a 401(k). The IRS exempts designated non-profit organizations from paying taxes, and a charity may withdraw the value remaining in your retirement accounts without incurring a tax liability.

What is a bequest and why is it important for my estate?

A bequest generally contains a statement of an intended purpose and how you wish an organization to use your gift. If its officers cannot accomplish your desired objectives, however, you may need to find a different charity to name as an alternative beneficiary.

By including charitable organizations in your will or trust, you may relieve your heirs from potential estate tax liabilities. The charities you choose for a bequest also communicate your values and may help your family to continue performing good deeds in your name.