Estate planning isn’t just about distributing your assets. It’s about defining your legacy. For many New Jersey residents, charitable giving offers a meaningful way to continue supporting causes that matter most, even after their lifetime. Incorporating charitable giving into your estate plan allows you to make a lasting impact while potentially benefiting from tax advantages.

Why Include Charitable Giving in Your Estate Plan?

Incorporating charitable giving into your estate plan serves two purposes: it supports organizations aligned with your values and can also reduce your estate’s taxable value. New Jersey families often find that philanthropy allows them to express gratitude, uphold family traditions, and make an enduring mark on their community.

Ways to Make a Legacy Gift

1. Bequests in a Will or Trust
   The simplest method of charitable giving is to include a bequest in your will or trust. You can designate a specific amount, a percentage of your estate, or a particular asset to go to your chosen charity.
2. Charitable Remainder Trusts (CRTs)
   A CRT allows you to provide income to beneficiaries for life or a term of years, with the remaining assets passing to a charitable organization afterward. This can provide both income and tax advantages.
3. Charitable Lead Trusts (CLTs)
   The opposite of a CRT, a CLT provides income to a charity for a set period before transferring the remaining assets to your heirs, potentially reducing estate and gift taxes.
4. Donor-Advised Funds (DAFs)
   A DAF enables you to make charitable contributions now and recommend grants over time. These funds offer flexibility and can be established as part of your estate plan.
5. Naming a Charity as a Beneficiary
   You can name a charitable organization as a beneficiary of retirement accounts, life insurance policies, or investment accounts, an efficient way to make a lasting gift.

Tax Benefits of Charitable Giving

Charitable contributions can lower estate and income taxes, depending on how gifts are structured. For example, charitable trusts and certain gifts can reduce your taxable estate. It’s essential to consult with an experienced Estate Planning Attorney to ensure compliance with state and federal laws while maximizing your benefits.

How to Choose the Right Charity

When selecting a charity:

• Ensure it’s a qualified 501(c)(3) organization.
• Review its mission and financial transparency.
• Consider causes that align with your personal or family values.
• Discuss your plans with the organization to ensure your gift aligns with their needs.

Final Thoughts

Charitable giving is one of the most rewarding ways to shape your legacy. By incorporating philanthropy into your estate plan, you can make a meaningful difference that lasts for generations.

If you’re ready to explore charitable giving options in your estate plan, contact LSS Law today for a consultation.

10 Frequently Asked Questions (FAQs)

1. What is charitable giving in estate planning?
   It involves including gifts to charitable organizations within your estate plan, ensuring part of your assets supports causes you care about.
2. Can I name a charity as a beneficiary in my will?
   Yes. You can designate a charity to receive a portion of your estate, specific assets, or the remainder of your estate.
3. Are there tax benefits to charitable giving?
   Yes. Charitable gifts can reduce estate and income taxes, depending on how your estate is structured. Speak with an experienced tax attorney to determine the best course of action.
4. What is a charitable remainder trust (CRT)?
   A CRT provides income to beneficiaries for life, with the remainder going to charity, often yielding significant tax advantages.
5. What is a charitable lead trust (CLT)?
   A CLT provides income to a charity first, with remaining assets eventually distributed to heirs.
6. Can I donate non-cash assets like property or stocks?
   Absolutely. Real estate, securities, and other assets can be gifted to charities through your estate plan.
7. Should I inform the charity about my gift?
   It’s recommended. Discussing your intentions ensures your gift aligns with the charity’s needs and expectations.
8. Do I need an attorney to set up a charitable gift?
   Yes. An estate planning attorney ensures your charitable gifts are legally sound and maximize your financial benefits.
9. Can I change or revoke my charitable gift?
   Yes. You can modify your estate plan at any time as long as you remain legally competent.
10. What’s the best way to start?
    Begin by identifying your charitable goals, consulting your attorney, and updating your will or trust accordingly.