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November 06, 2023

Charitable Giving

By Kimberly Tirrell

Financial Planning

Charitable Giving Options

We make a living by what we get, but we make a life by what we give.”  Winston Churchill

With the holiday season upon us, we at Baldwin Brothers take stock of the many things for which we are grateful.  We are particularly thankful for the opportunity to work with our clients and help them build their future and legacy. Through this process, we inevitably learn about and are inspired by our clients’ generosity when discussing charitable intentions and estate planning.

If you, too, find yourself in the giving spirit and want to learn more about charitable giving options for your estate plan, have a look at some of these strategies:

  1. Leave Money to a Charity in Your Will: Use a will to designate a charitable bequest.  This is one of the simplest ways to donate to charity through estate planning and it can lower your taxable estate. 
  1. Qualified Charitable Distributions: Tax-efficient giving using your Required Minimum Distribution to make a qualified charitable donation.  This eliminates income taxes due on the distribution. 
  1. Establish a Gift Through a Community Foundation:  This provides an opportunity to match donors and resources with community needs for the benefit of a region. 
  1. Gift Your Property: Non-cash gifts such as real estate can be part of your charitable giving plan.  It’s even possible to continue using the property for the rest of your life and then have the deed transferred to charity upon passing. 
  1. Gift Appreciated Stock: Donating appreciated securities held for more than one year, especially concentrated positions with large unrealized capital gains, is an effective way to avoid capital gains tax. 
  1. Create a Charitable Remainder Trust (CRT): Donations are made to the CRT which reduces the taxable estate.  A CRT provides a tax-exempt income stream for the donor and any beneficiaries.  When the donor/beneficiaries pass, the remaining funds pass to the designated charity. 
  1. Use Life Insurance or a Charitable Gift Rider: It’s possible to name a charity as a beneficiary on your policy.  A charitable gift rider is another option where a percentage of the policy’s face value is paid to the charity.
  1. Donor-Advised Fund (DAF): This is an investment account that is administered by a third party and is for philanthropic giving.  A DAF is an immediate tax benefit and offers the flexibility to support your preferred charities right away or slowly over time. 
  1. Gifting Tangible Assets to Charity: This can qualify for a fair market value deduction if there is a related use by the charity (i.e., donating painting to an art museum).  
  1. Family Foundation: Creating a family foundation allows you to give, not only during your lifetime, but beyond.  It perpetuates your philanthropic mission with more hands-on control and tax benefits.

If you are interested in learning more about any of these strategies and including charitable giving in your estate plan, Baldwin Brothers is available to offer guidance and support in reviewing these options.


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