Many of us have causes or organizations we want to support. Estate planning gives you the opportunity to extend that support beyond your lifetime. By including charitable giving in your estate plan, you not only leave a legacy but may also receive tax benefits and ensure your assets are used in a way that reflects your values.
Why Include Charitable Giving in Your Estate Plan?
Charitable giving in estate planning offers two major benefits:
- It allows you to continue supporting organizations that matter to you.
- It may provide tax advantages by reducing the size of your taxable estate.
Planning ahead ensures your intentions are clearly documented and carried out according to your wishes.
Common Ways to Make Charitable Gifts
There are several methods to include charitable giving in your estate plan. Each option comes with its own benefits:
1. Naming a Charity in Your Will or Trust
You can designate a charity as a beneficiary in your will or living trust. This lets you specify exactly how much or what portion of your estate should go to that organization. In some cases, creating multiple trusts for different charities may reduce estate tax liability.
2. Using Retirement Accounts
Retirement accounts such as IRAs provide a simple way to give:
- Beneficiary Designation: You can name a charity as the beneficiary of your IRA.
- Qualified Charitable Distributions (QCDs): Once you reach the age when required minimum distributions (RMDs) apply, in 2025 you can donate up to $108,000 per year directly from your IRA to a qualified charity. This reduces your taxable income while supporting your chosen cause.
3. Charitable Remainder Trusts
With a charitable remainder trust, you can receive income during your lifetime while ensuring the remaining assets pass to a charity after your death. This arrangement allows you to give while still maintaining financial security.
4. Community Foundations
A community foundation allows you to establish a charitable fund. This option gives you flexibility in how your contributions are distributed and can maximize both impact and tax benefits.
Tax Benefits of Charitable Giving
Strategically planned charitable gifts may:
- Reduce estate taxes by lowering the value of your taxable estate.
- Provide income tax deductions for lifetime gifts.
- Limit your adjusted gross income when using qualified charitable distributions from retirement accounts.
These benefits vary depending on your specific financial situation, so it’s important to review your options with both a tax advisor and an estate planning attorney.
Questions We Often Hear
Do I need to be wealthy to include charitable giving in my estate plan?
No. Gifts of any size can make a meaningful difference, whether it’s a small bequest in your will or a larger trust arrangement.
Can I support more than one charity?
Yes. You can divide your estate among multiple organizations, either through direct bequests or by creating multiple trusts.
What if I change my mind about which charity to support?
You can update your will, trust, or beneficiary designations at any time, as long as you remain legally competent.
Will my family lose out if I give to charity?
Not necessarily. Careful planning can balance your charitable goals with the needs of your loved ones. Many people choose to allocate only a portion of their estate to charity while providing for family first.
How Jones, Gregg, Creehan & Gerace Can Help
Thoughtful estate planning ensures that your charitable gifts are structured in the most effective way both for the organizations you want to support and for your tax and financial picture. At Jones, Gregg, Creehan & Gerace, we help Pennsylvania families and individuals explore their giving options, prepare the necessary documents, and create plans that reflect both their values and long-term goals.
Plan Your Legacy with Confidence
Charitable giving is about more than tax savings. It’s about shaping the future and leaving behind a lasting impact. If you are considering including charitable giving in your estate plan, we will walk you through your options and develop a plan that works for you.
Contact Jones, Gregg, Creehan & Gerace today to start building an estate plan that reflects your wishes and supports the causes you care about most.