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3 Reasons to Consider Planned Giving for Your Estate

why to consider planned giving for your estate

Planned giving is a fantastic way to honor causes you feel strongly about in life with carefully-managed donations after death. Essentially, “Planned Giving” is just a method of using your estate funds to support a philanthropic cause. Experienced and qualified estate planning professionals can help you navigate the complex tax and estate planning codes to maximize your gift while minimizing its burden. We can assist you in finding one to help meet your individual needs.

There are three ways to achieve planned giving: as a lump cash payment, as regular payments in return for “income” from the charity, and after your death. Why should you consider one of these methods for doling out your estate?

  1. To Avoid Capital Gains Tax

If you plan to give to a philanthropy during your lifetime, you may be able to do so in a way that avoids the expense of capital gains tax. When donating appreciated property such as securities or real estate, you will receive a charitable deduction on your taxes up to the full appreciated amount of the gift. Additionally, you’ll pay no capital gains tax or long term capital gains tax on the transfer which can amount to thousands.

  1. To Avoid Estate Tax

In death, planned gifts donated to a cause are called “bequests” or “beneficiary designations.” These gifts are exempt from the sizeable estate tax that often eats away at wealth transfers after death within a family. It’s worth considering, particularly, if you have no dependents or if your dependents are doing particularly financially well themselves.

  1. To Maximize the Impact of Your Gift

The most successful financial gifts are those made in earnest, not simply to circumvent tax laws. If you feel strongly about a cause or organization during your life, a planned gift can truly maximize the impact you’re able to have on that organization after your death. Whether you decide to leave a specific cash amount, a percentage of your assets, or even name a cause as the beneficiary of your retirement accounts, a planned gift has the greatest chance of doing the most good. For fundraising organizations, one large gift is always more useful than many small ones.
Would you like to find out more about how planned giving can impact your financial picture and change your overall estate plan? Contact us today to talk to a certified financial advisor who can help you find and work with an estate planning professional to better understand your idea for planned giving and find out whether or not this method of estate distribution is the right one for your assets.

By contacting NW Tax & Wealth, you may be offered information regarding the purchase of insurance products. All of our financial professionals are licensed insurance agents. Additionally, some individuals may also be registered with a broker/dealer or as an investment adviser. Our financial professionals do not offer estate planning, tax or legal advice. Always consult with a qualified advisor concerning your own situation.

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