Leaving a Legacy

Many donors make revocable (can be changed) commitments to charitable organizations. The donor receives no income tax advantages from such gifts. However, estate tax benefits may occur for those donors who wish to maintain control over their assets until they are directed to charities at their death.

It is important that we all maintain an up-to-date will or living trust, directing the disposition of assets at our death. Many Americans leave a portion of the assets to charities as their final act of philanthropy. It is possible to favor charities with a specific asset, a fixed dollar amount or a percentage of the "residual value" of one’s estate.

Beneficiary Designations
Various assets may be directed at death through means which avoid probate. Retirement accounts, life insurance proceeds, financial accounts and other assets can be distributed through beneficiary designation. Changing beneficiary designations to include charities (all or in part) represents a compelling way to direct one’s assets for the public good, without amending one’s will.

Beneficiary designations on retirement plans (IRAs, 401(k)s, etc.) allow individuals to give charity all or a portion of their retirement funds at death. It is also possible to name a charitable remainder trust to receive retirement fund assets and name one’s spouse as the trust’s income beneficiary. In either case, the donor has directed to charity an asset on which his or her heirs would have been subject to income taxation in future years.