Charitable Giving Through Estate Planning

Charitable giving is a powerful way to leave a legacy that reflects your values and supports causes close to your heart. Through estate planning, individuals in Kansas and Missouri have the opportunity to make lasting contributions to their favorite charities, nonprofits, and community organizations. Not only does charitable giving allow you to make an impact, but it can also offer significant tax benefits for your estate and heirs.



Understanding Charitable Giving in Estate Planning

Charitable giving through estate planning involves designating a portion of your estate to one or more charitable organizations upon your death. This can be done in various ways, depending on your goals, the size of your estate, and the specific causes you wish to support. Common methods include:

Bequests in a Will or Trust

• A bequest is a straightforward way to leave a specified amount of money or property to a charity. This can be a fixed sum, a percentage of your estate, or a specific asset such as real estate or valuable artwork.

Charitable Trusts

• Establishing a Charitable Remainder Trust (CRT) or Charitable Lead Trust (CLT) allows you to set aside assets for a charity while still benefiting from income or preserving wealth for heirs.

Beneficiary Designations

• Certain accounts like life insurance policies, IRAs, and retirement accounts allow you to name a charity as a beneficiary, bypassing the probate process entirely.

Donor-Advised Funds (DAF)

• A DAF allows you to make a charitable contribution, receive an immediate tax deduction, and recommend grants from the fund over time to your chosen charities.

Gifts of Real Estate or Appreciated Securities

• Donating real estate or appreciated securities can help avoid capital gains taxes while providing a substantial benefit to the charity of your choice.

Tax Benefits of Charitable Giving

One of the key motivations for charitable giving through estate planning is the potential for tax benefits. Both Kansas and Missouri follow federal estate tax guidelines, where charitable contributions can be deducted from the gross estate value, potentially lowering the taxable amount. Key tax advantages include:

• Estate Tax Deductions: Donations made to qualifying charities are fully deductible for federal estate tax purposes.
• Income Tax Benefits: For certain types of charitable giving, you may also benefit from income tax deductions during your lifetime.
• Capital Gains Tax Savings: Donating appreciated assets like stocks or real estate avoids the capital gains taxes you would incur if you sold the asset yourself.

Crafting Your Estate Plan to Include Charitable Giving

Incorporating charitable giving into your estate plan involves careful planning and consideration. Here are steps to ensure your legacy is impactful and aligned with your wishes:

Identify Your Charitable Goals

• Consider the causes that are most meaningful to you. Do you want to support local nonprofits in Kansas City, a national organization, or a global cause?

Choose the Right Method of Giving

• Decide whether a direct bequest, a trust, or beneficiary designation best suits your estate and financial situation.

Consult with an Estate Planning Attorney

• An experienced attorney can help you navigate the legal and tax implications of charitable giving in Kansas and Missouri.

Document Your Wishes Clearly

• Ensure your Will or Trust clearly specifies your charitable intentions to avoid any confusion or disputes.

Review and Update Your Plan Regularly

• Life changes, tax laws, and even your charitable interests can evolve over time. Regular reviews of your estate plan help maintain alignment with your goals.

Local Impact: Charitable Giving in Kansas and Missouri

Charitable giving through estate planning isn't just about national organizations. Many clients I’ve worked with have chosen to support local Kansas City-area nonprofits, educational institutions, and community organizations. By doing so, they have left a lasting legacy that directly impacts their community.

Would you like to explore how charitable giving could enhance your estate plan and create a legacy that endures? Contact my office today, and let's discuss how we can make your estate plan reflect your values and charitable goals effectively.