How Can I Incorporate Charitable Giving into My Texas Estate Plan?

 Posted on February 08, 2023 in Estate Planning

Giving money to charity is a great way to leave a legacy and help others in need. Incorporating charitable giving into your Texas estate plan can have several significant benefits, both for you and the organizations that will receive your support. In some cases, thoughtful philanthropic planning can also reduce the amount of tax due on your estate.

When it comes to estate planning in Texas, there are several ways to incorporate charitable giving into your plan. Some of the most common methods include creating a charitable trust, donating through an estate plan beneficiary designation, and making a bequest in your will.

Exploring the Benefits of Charitable Trusts

A charitable trust is a legal document that establishes an account funded by your assets and held for the benefit of one or more charities. Charitable trusts allow you to donate a large sum of money to the organization(s) of your choice and receive significant tax benefits, as well as the satisfaction that comes with supporting the causes you believe in.

One type of charitable trust available in Texas is a Charitable Remainder Trust, which lets you draw an income or provide income to a beneficiary during the beneficiary's lifetime. The remaining assets are then passed to the chosen charities upon the beneficiary's death. Charitable Lead Trusts, meanwhile, allow you to pass money or assets directly to your charity of choice and receive tax benefits during your lifetime, with any remaining funds going to beneficiaries after your death.

Charitable Bequests Through Your Will

Another way to give to charity is through your will. You can designate a percentage of your total estate or a specific amount of money to be donated upon your death. This type of donation, called a "bequest," ensures that the organization you wish to support will receive the funds they need after you're gone.

Gift Annuities and Other Donation Options

In addition to trusts and bequests, you can also donate through gift annuities, which are a type of contract between the donor (you) and the charity. The charity promises to pay a fixed amount of money each year in exchange for a lump sum gift from you. This type of donation provides you with tax credits and the satisfaction of helping an organization you care about.

Including charitable giving in your Texas estate plan can be a great way to leave a lasting legacy, reduce taxes, and support organizations that are important to you. With careful legal advice and planning, you can ensure that your wishes for charitable giving are fulfilled after you are gone.

Contact a Flower Mound Estate Planning Lawyer

If you want to incorporate charitable giving into your estate plans, make sure you do so in a way that minimizes taxes and maximizes the benefits associated with your gracious giving. At Colbert Law Group PLLC, we understand the intricacies of estate planning and can help you create a plan that works for your goals. Contact our Denton County estate planning lawyer to learn more about how charitable giving can be incorporated into your plans. Call 972-724-3338 for a confidential consultation.

Source:

https://www.irs.gov/charities-non-profits/private-foundations/charitable-trusts