Many wealthy individuals in Maryland give back to the community during their lifetimes by supporting one or more charities. Yet, many wonder what they can do after they have passed away. The answer could be establishing planned giving as part of your estate plan.
What is planned giving?
The estate planning process has many different components. Planned giving can benefit your favorite charities, reduce income taxes when you are still alive, and possibly reduce estate taxes for your heirs. It’s one of the more thoughtful components of your legacy, as you’ll also have to consider how much of your assets you want to set aside for your beneficiaries, along with how much money you will need to live on for the remainder of your life.
Planned giving has many options
You don’t have to bequeath money to your charity. Most Americans have about 93% of their wealth tied up in real estate, vehicles, and other non-cash properties. Leaving an item to a charity is feasible in some circumstances, as organization executives can sell the item and use the money from the proceeds to benefit their non-profit. Structuring planned giving can also involve complex structures that include charitable gift annuities. Remainder, annuity, and lead annuity trusts, among other forms. Consider which assets you want to leave to your favorite organization before determining its structure in your estate plan.
Securing your legacy
The primary reason for estate planning is to secure your wealth and legacy. Before including planned giving in your estate, ensure that you have adequately taken care of beneficiaries with trust, retirement account designations, investment accounts and similar assets. If you are unsure what you want to leave to one or more charities, you can always add it later to your plan.
Consider working with qualified financial experts to determine what assets you should donate and what form they should be in. A certified financial planner can help you decide what assets will be most beneficial for current income taxes and estate taxes for your heirs so you can make an informed decision based on your wishes.