Make Charitable Giving Part of Your Estate Plan

Incorporating charitable giving into your estate plan can benefit your community and your income tax return. Charitable giving often reflects your age and stage of life.

Giving to charity isn’t just a smart strategy for community building, its carries income tax benefits too!

Charitable giving is top of mind in December with many yearend campaigns and the tax year end approaching. Building charitable giving into your estate plan is another way to give back to the community. Planned giving can take the form of giving cash, donating shares, securities or mutual funds or life insurance. If you donate shares or other securities “in Kind” to a charity, you get a tax break on the capital gains.

Many individuals are not aware of the benefits of charitable giving in their wills, giving to a charity can be a great way to deal with assets, especially when you have valuable property, bonds or stocks. It can be more tax efficient to donate these assets rather than cash. The donation of stocks, bonds, mutual funds and segregated funds can eliminate capital gains taxation; it also gives the estate a charitable donation receipt for fair market value of the shares. This could create significant income tax savings for an estate while providing a large benefit for the charity.

Life insurance provides instant liquidity and tax free cash at death which can help the estate fulfill specific charitable obligations as set out in the deceased will. Life insurance can create flexibility and liquidity at a time when it is needed most.

Whether you are motivated to give by pure generosity or a desire to reduce your tax bill, the benefit to the charities you support is the same.

Charitable giving is just one more aspect to managing your money. Professional advice about estate and financial planning can help you not only make the most of your retirement years, but also leave your estate in good shape.