When Decisions Matter.


3 Reasons to Include Charitable Giving in Your Estate Planning

Planning for retirement isn’t easy to say the least. Everyone’s situation is different, so any recommendation is not one-size-fits-all. That’s why a team of professionals — from financial advisors and accountants to estate planning attorneys — could help you to determine the steps that make sense for you.

As your legal counsel, we take your finances into consideration alongside your goals, interests and family dynamic.

One suggestion we provide is to consider including charitable donations in your estate planning. This might or might not be the answer for you, but here are a few reasons why we’ve suggested it.

  1. You may be able to make charitable gifts directly from retirement funds.

When you need to start taking out the minimum required distribution from your IRA, you can actually give an amount to charity and NOT pay taxes on it. Anyone aged 70 ½ and older can direct that an IRA distribution (up to $100,000 per year) be paid to a charity of his or her choice. It’s important to note that this cannot occur with a 401(k), only an IRA. This is desirable for individuals with charitable intentions, such as a church attendee who regularly provides an offering or a supporter of the arts who regularly donates during an annual drive.

  1. You can provide a charitable gift upon death from retirement funds.

If a charity depends upon your donation during your lifetime, it will still depend upon it after your death. If you pass away and do not establish donations to charities that have depended on you, they will have to make up for that lost donation. One of the best ways to provide a charitable gift upon your death is to make such a gift directly from your retirement account. The charity will not have to pay income tax on the gift. If individuals inherit a retirement account they will pay income tax on the gift.

  1. You can hand-pick the charity or charities you wish to support.

The options are just about limitless as long as the charity is recognized by section 501(c)(3) of the Internal Revenue Code. You can pick one charity, or you can pick 20 and determine the allocation you want to provide to each. If you’ve never been partial to a charity before but would like to start giving, we can even help to provide you with options based upon your interests and intentions. The local organization Leave A Legacy York County provides a brochure every year full of suggestions of individuals and organizations to help guide charitable giving from your estate.

An estate planning attorney can help you to decide how to best approach retirement as it relates to charitable planned giving. Contact Stock and Leader’s Estate Planning team today.

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