How to Effectively Include Philanthropic Goals in Your New York Estate Plan

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How Can I Incorporate Philanthropy into My Estate Plan?

Incorporating philanthropy into your estate plan can be an excellent way to leave a lasting legacy and support causes you care about. In New York, there are several ways to do this. One common method is through a bequest in your will or trust. A bequest is a gift of money or property that you leave to a person or organization in your will. You can specify a certain amount of money, a percentage of your estate, or a particular asset to be given to your chosen charity. Another option is to establish a charitable trust. This is a type of trust where a portion of the trust’s assets are used for charitable purposes. The remainder of the trust’s assets can be distributed to your heirs. Charitable trusts can offer significant tax benefits, but they are more complex to set up and manage than simple bequests.

What Are the Tax Benefits of Including Philanthropy in My Estate Plan?

Including philanthropy in your estate plan can provide significant tax benefits. Charitable contributions made through your estate plan are generally deductible from your gross estate for federal estate tax purposes. This can significantly reduce the amount of estate tax that your estate may owe. For example, let’s say you have an estate worth $5 million, and you leave $1 million to charity. Your taxable estate would be reduced to $4 million, potentially saving thousands of dollars in estate taxes. However, the tax benefits of charitable giving can be complex, and the rules vary depending on the type of gift and the type of charity. It’s important to consult with an experienced attorney to understand the potential tax implications of your charitable giving.

What Are Some Considerations When Choosing a Charity for My Estate Plan?

When choosing a charity to include in your estate plan, it’s important to do your research. Not all charities are created equal, and you want to ensure that your gift will be used effectively and in line with your values. Consider the charity’s mission and whether it aligns with your own goals and values. Look at the charity’s financial health and how it uses its funds. There are several online resources that can help you evaluate a charity’s effectiveness and financial health, such as Charity Navigator or the Better Business Bureau’s Wise Giving Alliance. Also, consider whether the charity is a qualified organization for tax purposes. In general, only gifts to qualified organizations are tax-deductible. Your attorney can help you determine whether a particular charity is a qualified organization.

What If I Want to Support a Cause but Don’t Know Which Charity to Choose?

If you want to support a cause but aren’t sure which charity to choose, an experienced attorney can help. They can provide guidance on how to evaluate charities and choose one that aligns with your goals and values. One option is to set up a donor-advised fund. With a donor-advised fund, you can contribute to the fund and receive a tax deduction now, and then recommend grants to charities over time. This can give you time to research and choose the charities you want to support.

Alternatively, you could contribute to a community foundation or a field-of-interest fund. These organizations support a variety of charities in a specific geographic area or field of interest. Regardless of the specifics, an experienced attorney can provide valuable guidance and ensure that your plan is legally sound and aligns with your goals.

What If I Want to Change My Philanthropic Goals in My Estate Plan?

It’s not uncommon for your philanthropic goals to evolve over time. Perhaps you’ve become passionate about a new cause, or you’ve learned more about a charity and want to adjust your support. Fortunately, your estate plan isn’t set in stone and can be modified to reflect your current wishes. If you’ve made a bequest in your will, you can change it by creating a new will or adding a codicil, which is a legal document that amends your existing will. If you’ve set up a charitable trust, you might be able to change the beneficiary charity, depending on the type of trust and its terms. However, changing your estate plan can have legal and tax implications, so it’s important to consult with an experienced attorney. They can help you understand the potential impacts of the changes and ensure that your new plan aligns with your current goals and complies with New York law.

How Can an Experienced Attorney Help with My Philanthropic Estate Planning?

Incorporating philanthropy into your estate plan can be complex, and it’s important to get it right. An experienced attorney can help you understand the different ways to include philanthropy in your estate plan and the pros and cons of each option.

They can help you set up a charitable trust, if that’s the right option for you, and ensure that it’s properly managed. They can also help you understand the tax implications of your charitable giving and ensure that you’re maximizing your tax benefits. In addition, an attorney can help you choose the right charity and ensure that your gift is used in the way you intend. They can help you draft a gift agreement that specifies how your gift should be used and what happens if the charity doesn’t follow your instructions. Incorporating philanthropy into your estate plan is a significant decision that can have lasting impacts. It’s important to get it right, and an experienced attorney can provide the guidance and expertise you need.

If you’re considering including philanthropy in your estate plan, call The Davidov Law Group today at 516-253-1366.

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