Texas is one of the most philanthropic states in the United States, according to Texas Monthly. And if you donate to charitable organizations, you might want those donations to continue even after you pass away. You can accomplish this by including planned giving in your estate plan.
Estate planning and charitable giving
Estate planning involves making arrangements for the distribution of your wealth and assets after your death. To include planned giving in your estate plan, you need to name the charitable organizations of your choice. If you currently donate to one or more charities, consider including those specific charities in your estate plan.
You might want to consider the tax implications when deciding how to structure your donations. This is important because there are several ways in which you can set up your donations.
Bequests
A bequest is a one-time donation made after you pass away. You can choose as many charitable organizations as you want. Each organization will receive the amount specified in your will or living trust.
Charitable remainder trust
A charitable remainder trust is specifically for planned giving purposes. You’ll place property or cash into the trust. The trust then pays you a fixed amount of income each year. After you pass away, your specified charity receives payments from the trust.
Donor-advised funds
You can create a donor-advised fund by contacting a 501 C3 organization. This type of organization is tax-exempt because it offers charitable programs. Once the fund is created, the organization has control of the fund, but you make donations. You or a representative also have some say in the distribution of funds from the account.
Including planned giving in your estate plan allows your assets to continue helping charities you care about. It’s about giving back to your community and leaving a lasting legacy.