What Are Your Planned Giving Options?
Planned giving is a method of donating through a trust or a will at a future date to an organization or non-profit allowing philanthropic people to leave a legacy.
Planned giving can offer tax savings for the donor. If you’re committed to supporting an organization into perpetuity, planned giving offers a meaningful way to contribute long after you're gone. But before you decide if planned giving is the right answer for your estate planning or will, consider these options.
Consult an Expert, Then Make Sure it Fits You
While consulting with your tax or financial advisor is recommended before making any planned giving decisions, it can be helpful to gain some understanding about the various options that are available, and which of these options are more likely to suit your own particular financial needs and personal philanthropic philosophy.
The following are just a few of the ways you can continue to give back to your favorite causes for the foreseeable future:
Leave the organization a bequest – one of the easiest ways to support your favorite organization is to simply name them in your will or through a trust. You can choose to leave a stated amount to the organization or leave a percentage of your estate.
Stocks, Bonds, Mutual Funds or Securities – Donating appreciated stocks, bonds, or mutual funds will increase the impact of your gift to the organization while also providing you with significant tax savings. In most cases, you will be able to transfer the securities directly to the organization in question, but be sure to check with your financial planner for more specifics on tax benefits.
Life Insurance or Retirement Plans – If you’re more comfortable leaving your estate to your immediate heirs, you can still choose to support your favorite organization by naming them as the beneficiary of your life insurance plan, retirement plan, or annuity assets.
A Charitable Gift Annuity – A bit more complicated than a simple bequest, a charitable gift annuity allows donors to gift the nonprofit of their choice with a significant sum of money. The minimum charitable gift annuity is typically $10,000. Once that donation has been received, the nonprofit then will provide you with a set income determined by the money donated. This payment ends upon death, with the nonprofit then retaining the balance left in the annuity. It’s important to check with a financial advisor about the laws in your state regarding charitable gift annuities. You may also want to check with the organization that would receive the funds, as not every organization has the resources in place to accept charitable gift annuities.
A Charitable Remainder Trust – A charitable remainder trust is similar to a charitable gift annuity, though because of the expense of administering a separate trust, the minimum donation amount typically starts at $100,000, with the donor receiving an annual amount until the trust is completed, with the nonprofit receiving the remaining funds.
Real Property – While not gifted as frequently as stocks, bonds, and securities, some do choose to leave real property to a beloved nonprofit organization. Real property can include buildings and land. Again, be sure to check with the organization in question to ensure they can accept this type of donation.
Personal Property – While personal property can also be bequeathed to an organization, it’s important to check with the organization first to determine whether they can accept these items.
Being aware of the numerous planned giving options available will make it much easier for you and your financial advisor to create a plan that will work best for you.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2023 Advisor Websites.