Charitable giving is an option to consider if your estate is sizable enough to worry about federal estate taxes, but even if it is worth substantially less your estate may have to pay other kinds of taxes, such as for capital gains. An estate planning lawyer in Bryan will discuss the various options for charitable contributions and help you determine which, if any, if best suited to your situation.
Advantages of Charitable Giving
Your charitable contributions can help round out your estate plan. Reforms to the federal estate tax a decade ago may well mean that you don’t have to worry about estate taxes, but consider that a life insurance policy or substantial increase in the value of real estate can drive up your estate value to within range of this lower limit.
Aside from avoidance of estate taxes, charitable giving offers other advantages as well:
• Capital Gains from Real Estate: You can place assets from a sold property into a charitable trust. While this means that your heirs would not enjoy these assets, you can compensate for this by purchasing a life insurance policy.
• Your Can Help Others While Helping Yourself: Certain options can satisfy your altruistic intentions while also helping provide an income to you for your later years.
• Charitable Giving Offers Flexibility: With the numerous options available, you can develop an estate plan using charitable contributions that conforms to your specific needs.
Methods of Charitable Giving
There are quite a number of estate tools available for charitable contributions. The following are two of the most popular:
• Create/Contribute to a Foundation: Following reforms to income taxes in 1969 wealthy individuals were less inclined to create private foundations because the tax advantages were largely removed. If creating a foundation does not help you, you might consider contributing to an existing one.
• Create a Charitable Remainder Trust: A charitable remainder trust allows you to enjoy a percentage of assets within it (5& to 50%) for up to 20 years, after which the remainder goes to a trust of your choice. You can opt for either a unitrust or annuity trust. Your attorney can discuss the difference, but in a nutshell a unitrust is more flexible and can generate more income, while being riskier.
For More Information and Answers to Questions
Creating an estate plan is important for anyone who wishes to leave assets to heirs. You do not need to be wealthy to have an estate plan. Charitable giving is one useful tool to consider. Work with a Bryan estate planning attorney with years of experience helping clients with their estate needs. Call Peterson Law Group today at 979-703-7014 or 936-337-4681.