Estate Planning and Charitable Giving Options:
You might be thinking about incorporating charitable giving into your financial planning.  Your reasons may be altruistic–to give back, to support a worthy cause, to uphold the teachings of your faith–or they may be motivated by personal gain–to lessen your tax burden, for instance.  Your motives for wanting to give charitably are yours alone, and although we are not going to delve into them in this forum, you should be able to define them for yourself and your financial advisor before planning your giving.

AllFinancialAdvisors.com recommends working with your personal financial advisor to create your giving plan.  There are many ways to give, and an independent registered investment advisor (RIA) can help you determine which is right for you.  A financial advisor will also be able to help you figure out how much you can afford to give, work this ‘giving’ component into your budget, while taking tax issues into consideration, and evaluate giving opportunities.

That said, let’s take a look at some of the ways in which you can build charitable giving into your financial plan.

• If you want the tax benefits associated with charitable giving, be sure you and your financial advisor are following the Internal Revenue Service (IRS) guidelines.
• Donate assets like vehicles, art, real estate, retirement accounts, household goods and other items of value; all can be tax-deductible.
• Set up a charitable remainder trust.  A charitable remainder trust is your own private fund to which you can contribute cash, investments and tangible assets. It will provide a designated taxable income for life, payable to yourself or to your beneficiaries. After the income is paid or all beneficiaries have died, the money remaining in the trust is given tax-free to the charities you name. 
• Give appreciated stocks. If you’ve held stocks or a mutual fund for at least 12 months, you can gift those assets to a charity and receive a tax deduction of their fair-market value.
• Bequeath money to charity. When you write or revise your will or living trust, you can include instructions to distribute a portion (or all) of your estate to specific charities. Assuming those charities are qualified according to the IRS, your bequest can be deducted from the federal tax on your estate.
• Name a charity as the beneficiary of a life insurance policy.
• Give to a pooled income fund. These are similar to charitable remainder trusts, but the charity is in charge of the fund, and you simply contribute to it. The charity pools all contributions to the fund, invests them, and pays you a taxable income. When you die, your interest in the fund reverts to the charity.
• Volunteer.  Many charities need the time and talents of people from all walks of life.  When you volunteer, you can deduct some of the expenses associated with that volunteer work–including the mileage you drive to volunteer.
• Give good old-fashioned cash.  It’s quick, it’s not complicated, and you can deduct the amount you give from your taxable income, provided you donate to a qualified charity and get a receipt.

 
Your financial advisor and/or financial planner can explain these and other ways of giving to charities (including gift annuities, donor-advised funds and private foundations) and help identify ways to make the most of your contributions, such as employer matching funds.  Financial advisors have varied views on the appropriate fashion to give, so check in with your current financial advisor and ask these questions.

If you don’t currently have a financial advisor, simply SEARCH HERE for qualified financial advisors who have various specializations in Estate Planning, Charitable Giving and/or Money Management — or start by entering your Zip code in the space provide above — to begin your search.  Best wishes. 

Today’s blog is in honor of Martha’s lifelong charitable giving of herself and her artistic talents.  MB