Charitable Giving in your Estate Plan

Appreciated Stock

If you own any stock that has seen an increase in value, that stock gets referred to as “appreciated stock.” Selling appreciated stock requires you to pay taxes for the capital gains of the appreciation. But if you elect to donate that appreciated stock to a charity, the charity can turn around and sell that stock without paying the capital gains taxes. Plus, you get a tax deduction.

Charitable Remainder Trust

A charitable remainder trust, or a CRT, allows an individual to name a charity as a beneficiary. This option allows the charity to receive regular disbursements from the CRT for a given time frame. The rules about how much the individual receives from the CRT and the length of time for receiving those funds can vary, but those rules will also need to be specified. And just like a charity with proper organization and operation, the CRT itself will also be tax-exempt.

Named as a Beneficiary

Just like you can choose to name specific people as beneficiaries in your will or trust, you have the option of naming a charity or organization as a beneficiary. When considering this option, keep in mind the funding amount or asset distribution might be required to submit to the probate process before the organization can receive the intended assets. If you decide to leave $100,000 to the Shriner’s Organization but owe a debt of $10,000, the intended amount may end up being smaller once the debt gets settled. On the other hand, the charity’s tax-exempt status will negate any income taxes that would have to be paid for withdrawing funds left to the charity through your retirement account. Want to learn more about how to include charitable giving within your estate plan? Contact The Hill Group LLC today.