Make charitable giving easy with help from your Millman Law Group attorney.
If you’re passionate about supporting a charitable cause, your estate plan can help you leave a lasting impact. Many people choose to designate a portion of their assets to a favorite charity, ensuring their generosity continues beyond their lifetime. However, to make the most of your charitable giving, it’s important to structure your donation in a way that benefits both the organization and your estate. Here are the top three things you need to know about leaving money to charities in your estate plan crafted by the Millman Law Group.
Choose the Right Giving Method
There are several ways to leave money to a charity in your estate plan, and selecting the right method ensures your gift is distributed according to your wishes.
- A Charitable Bequest in Your Will – The simplest option is to include a bequest in your will, specifying a fixed amount, a percentage of your estate, or specific assets to be donated.
- A Charitable Trust – A charitable remainder trust allows you to provide income to beneficiaries (such as family members) for a set period, with the remaining assets going to charity. A charitable lead trust provides income to the charity first, then transfers the remaining assets to your heirs.
- Naming a Charity as a Beneficiary – You can name a charity as a beneficiary on retirement accounts, life insurance policies, or bank accounts, allowing the organization to receive funds directly without going through probate.
- Donor-Advised Funds (DAF) – If you want flexibility in your giving, you can set up a donor-advised fund, which allows you to contribute assets during your lifetime and have them distributed to charities over time.
Understand the Tax Benefits
Strategic charitable giving can provide tax advantages for both your estate and your heirs.
- Estate Tax Benefits – In Florida, there is no state estate tax, but large estates may still be subject to federal estate tax. Leaving assets to a qualified charity can help reduce the taxable value of your estate, potentially lowering estate tax liability.
- Avoiding Capital Gains Tax – If you donate highly appreciated assets like stocks, real estate, or other investments, your estate may avoid capital gains tax, maximizing the value of your charitable gift.
- Retirement Account Distributions – Naming a charity as a beneficiary of an IRA or 401(k) can be a tax-efficient way to donate. Since charities don’t pay income tax, they receive the full value of the account, unlike individual beneficiaries, who would owe income tax on distributions.
Ensure Your Wishes Are Clearly Outlined
To prevent confusion or legal challenges, it’s essential to document your charitable intentions clearly.
- Be Specific in Your Will or Trust – Clearly state the charity’s full legal name and specify how you want the funds to be used (e.g., general support, a scholarship fund, or a specific program).
- Keep Records Updated – Charities can merge, change names, or close over time. Regularly review and update your estate plan to ensure your donation goes to the intended organization.
- Consult an Estate Planning Attorney – An experienced attorney at the Millman Law Group can help you structure your charitable giving in a way that aligns with your overall estate plan while maximizing financial and tax benefits.
Leave a Legacy That Makes a Difference
If you’re ready to include charitable donations in your estate plan, The Millman Law Group can guide you through the process and help you craft a giving strategy that aligns with your goals. Reach out today to start planning your legacy.
Estate Planning Made Easy With Millman Law Group
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs Trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.