Should You Leave Your Assets to Charity?
Giving money or assets to charity is a popular philanthropic deed. It is a nice way to support causes or communities that you appreciate, even after you pass away. Whether you leave part or all of your estate to charity, there are many different ways to achieve your charitable goals. Plus, it can have some positive benefits during your lifetime.
Ways to leave assets to charity
- Lifetime gifts: If you choose to gift assets to charities during your lifetime, you will often qualify for an income tax deduction. Talk to a tax professional before you take this step, however. Although you may be able to carry excess gifts over to the next tax year, there are limits to how much you can deduct each year. Some assets, like highly appreciated securities, are especially good for lifetime giving: you can avoid capital gains tax you would incur if you cashed them in yourself.
- Trusts: You can also set up revocable or irrevocable trusts for charitable giving. Charitable lead trusts allow you to donate money to charities during your lifetime, while preserving the remainder for other beneficiaries, like family members.
- Retirement accounts: Retirement accounts can have the highest tax liability of any asset. Leaving your retirement accounts to charity can help decrease the federal estate tax burden, thanks to the charitable deduction, and the charity would not have to pay income tax on the distributions.
- Other ways of giving: There are also specialized ways to give to charity, such as charitable giving programs and private foundations. Be sure to talk to financial and tax planners, as well as your estate planning attorney, for professional advice.
Charitable giving can benefit you and the causes you support. For experienced estate planning assistance in Tampa, FL, contact Baumann Kangas Estate Law today.