Leaving Behind Assets to a Charitable Cause
When you plan your estate, you have the option to leave some assets behind to charitable causes, in addition to what you give your other beneficiaries. There are several strategies through which you can do this:
- Wills: If you have a will, you can make a bequest to the charity or cause of your choice. However, keep in mind that wills can potentially be challenged by other heirs. A situation could arise in which a beneficiary is upset that you left more to the cause, and attempt to challenge the will’s validity.
- Trusts: You can establish a special charitable trust and fund it with the assets you wish to leave behind. Upon your passing, the contents of the trust are passed on to your cause. There are some limitations with such trusts, however, as you are not allowed to take income from the trust for more than 20 years. These types of trusts are also irrevocable, so you need to be completely sure about your decision.
- Foundations: This strategy involves establishing your own nonprofit organization to take care of the distribution of your charitable donations. This can be a complex and expensive process, so it is typically only recommended for larger donations and estates. You are also required to file annual reports with the Internal Revenue Service, and the organization itself must contribute at least 5 percent of its asset value every year.
An attorney will help you determine what the best course of action is if you wish to leave assets behind to a charity or cause. For more information, contact the trusted Tampa estate planning lawyers at BaumannKangas Estate Law.