How to Provide for a Charity in Your Estate Plan

Many people who enjoy financial success feel it is important to support causes they believe in and contribute to charities throughout their lifetime. If they so choose, they can also ensure that a charity receives a portion of their estate after they pass away. If you have questions about how to provide for a charity in your estate plan, it is advisable to contact an experienced estate planning attorney to discuss your options.

How to Provide for a Charity in Your Estate Plan

• Charitable Donations Through Wills

There are multiple ways to provide for charities in estate plans. For example, parties can make charitable donations via wills. There are often tax benefits to making charitable donations through wills. Specifically, donations transferred to qualified charitable organizations from a deceased person’s gross estate may qualify for an estate tax charitable deduction. Only gifts used solely for charitable purposes qualify for the deduction. Further, only entities created exclusively for scientific, religious, charitable, educational, or literary purposes are deemed qualified charitable organizations.

Charitable donations made through wills must be clearly worded, otherwise, the gift may fail. In other words, the legal name and address of the charity should be indicated. It is essential that the testator transfer the gift directly to the charity as well, as gifts made to a charity through a third party do not qualify for the charitable donation estate tax deduction.

Additionally, will provisions donating assets to charities must clearly state that the gift should only be used for charitable purposes, otherwise, the estate cannot claim a charitable deduction for the donation. Parties that wish to donate to charitable causes in general rather than a specific organization can do so, and as long as they indicate the gift should be granted to a qualified charitable organization, the estate will qualify for a tax deduction.

• Charitable Trusts

People can give to worthy causes by creating charitable trusts. Washington law defines charitable trusts as entities that hold income-producing assets that are invested to support certain purposes. Among other things, they support religious, charitable, educational, and benevolent institutions. Most charitable trusts operating in Washington are required to register with the Charitable Trust Program of the Office of the Secretary of State, but there are exceptions for entities the IRS recognizes as religious organizations, accredited public education institutes, and those whose charitable assets are in the nature of a remainder.

Charitable trusts provide donors with tax benefits and protect assets from creditors, but they are typically irrevocable, meaning the terms of the trust cannot be altered once they are created. As such, they may not be appropriate for people with uncertain financial futures or those prone to indecisiveness.

Meet With a Seasoned Estate Planning Attorney to Discuss Your Options

Charitable giving can make a significant impact in the lives of both the donor and the recipient, and many people wish to provide for charities not only during their lives but also after they pass away. If you are interested in learning more about how to provide for a charity in your estate plan, you should meet with a seasoned estate planning attorney to discuss your opportunities for charitable giving. Call Gregorek & Associates at 425-284-3450 or fill out our contact form and we will be in touch to schedule a meeting.