How Can You Effectively Include Charitable Donations in Your Estate Plan?
Adding charitable giving to your estate plan lets you support causes that reflect your values. With early planning and professional guidance, you can create a legacy that lasts for generations. A skilled estate planning attorney can help you pick the right tools and align your gifts with tax rules in Arizona, Minnesota, and Wisconsin.
Research and Select Charitable Organizations Carefully
Before you commit, confirm that the charity is reputable and eligible for tax-deductible gifts. Start with the IRS Tax-Exempt Organization Search. Review recent Form 990 filings and verify transparency. You can also check independent sources such as Charity Navigator. For state-level checks, see the Minnesota Attorney General charity search and the Wisconsin DFI Charitable Organizations pages.
Choose the Right Giving Options for Your Circumstances
You can give during life or at death. The best choice depends on your cash flow, tax posture, and goals. Tell your executor and family what you intend, and notify the charity if you plan to give complex assets.
Wills and Charitable Bequests
Including a charity in your will ensures your gift reaches the right organization. You can structure bequests in several ways:
- Specific bequest: Leave a set dollar amount or a named asset.
- Percentage bequest: Give a fixed percentage of your estate.
- Residual bequest: Leave what remains after other distributions.
- Contingent bequest: Give to charity only if a primary beneficiary predeceases you.
Trusts for Charitable Giving
Trusts can add control and tax benefits. Common options include:
- Charitable Remainder Trust (CRT): Pays income to you or another beneficiary for life or a term, then sends the remainder to charity. Learn more from Investopedia’s CRT guide.
- Charitable Lead Trust (CLT): Pays income to a charity for a set period, then transfers the remainder to your heirs, which can reduce gift and estate taxes.
- Revocable Living Trust: Names charities as beneficiaries while you keep flexibility to revise your plan. See our overview of trust-based planning.
Consider the Tax Implications
Smart planning can reduce estate and income taxes while increasing your impact. Gifts to qualified organizations may be deductible. Donating appreciated assets, such as stock or real estate, can avoid capital gains you would owe if you sold first. Coordinate your gifts with the rules summarized on the IRS charitable deduction page.
Why Work With an Experienced Estate Planning Attorney?
Precise documents prevent mistakes and delays. Our team at Metropolitan Law Group structures bequests, CRTs, CLTs, and beneficiary designations that match your goals and comply with Arizona, Minnesota, and Wisconsin law. For help, book a complimentary 15-minute Discovery Call with our experienced staff or call Arizona 480-409-8200 or Minnesota/Wisconsin 612-524-9414.
