Whether it’s donating time at a local shelter, raising money to help fight a disease or exerting energy to build homes for those in need, people from all walks of life choose to make charitable endeavors an important part of their everyday lives.
In fact, more people than ever are now taking their commitment to giving back one step further by making plans to donate their hard-earned assets to those charities that are near and dear to their hearts.
If you don’t believe it, consider how a recent survey found that 40 percent of participants with assets ranging between $1 million and $4.9 million planned to donate anywhere from 1 percent to 10 percent of their accumulated wealth to favored charitable causes in their estate plans.
As encouraging as this is, it’s important to understand that the ability to make meaningful contributions to charity isn’t just reserved for the wealthy. Indeed, those with fewer assets can not only include these sorts of provisions in their estate plan, but also use it as a mechanism through which to reduce their tax liability.
By way of illustration, consider the following:
- Through a simple will: Here, a person can elect to leave a set amount of their assets to one or more charitable organizations named in their will; this step will not only provide the charitable organization with much-needed funds, but also provide the donor with a not insubstantial tax deduction.
- Through an individual retirement account: Here, a person can elect to name one or more charitable organizations as a beneficiary of their IRA; this step will not only provide the charity with much-needed funds, but also serve to reduce the overall amount of estate taxes owed by the donor’s family.
No matter your income level, consider speaking with an experienced legal professional to learn more about how to create a comprehensive estate plan that honors your exact wishes and preserves your hard-earned assets.