Lifetime gifts may carry considerable advantages over charitable bequests. "One interesting aspect of lifetime giving is that you get to see your donation in action, even if you prefer to do so anonymously," says Linda S. Beerman, chief fiduciary officer for Atlantic Trust. "Even the less charitably inclined sometimes view this as a valuable incentive, considering that at least a portion of those funds would otherwise go to taxes."
There’s also the goal of receiving an income tax deduction, as well as estate tax savings, explains the PR Newswire article, titled “Benefits of lifetime charitable gifts can outweigh bequests.” For instance, individuals who give cash to public charity typically are entitled to an income tax deduction of up to 50% of their adjusted gross income (AGI) or up to 30% of their AGI for donations of other appreciated assets that are held for at least a year. What’s more, these deductions can be carried forward for up to five years if they can’t be taken in the year the gift was made.
There a few factors that come into play when creating a giving plan. Donors need to consider the pros and cons tax-wise of donating various types of property—and also the manner and timing of the gift.
There are other ways to give besides writing a check, accordingly to the original article, like structured giving vehicles. These types of strategies include a donor-advised fund, a private foundation, or a charitable remainder trust. These can give you additional benefits such as convenience, control, and anonymity. In addition, donors are able to leverage multiple giving vehicles to maximize the effect of their charitable giving.
Gifting real estate or tangible property, like a valuable piece of art or a classic car, are also terrific ways to make a sizable contribution to a charity. However, these types of donations may be a little more complicated. The timing of your gift or charitable donation can also be a critical element in your decision making process, as a donor's financial profile and tax outlook could influence when you make the gift and whether you do it in a single year or you start a multi-year gifting program.
A qualified estate planning attorney, working with your accountant, will know how to best structure your giving intentions to maximize your gift for both you and the recipient.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: PR Newswire (March 12, 2015) “Benefits of lifetime charitable gifts can outweigh bequests”