For many people, philanthropy is a way of life. If you are one of those people, the odds are good that you devote a good portion of your time and money to causes that are important to you. If gifting is part of your everyday life, there is no reason is need not continue to be part of your life even after your death. There are several different ways in which charitable gifting can be incorporated into your comprehensive estate plan. Because both philanthropy and your estate plan are highly personal it is bets to consult with an experienced Illinois estate planning attorney to determine how best to include charitable gifting in your estate plan; however, in the meantime it may be beneficial to learn about some of the most common options.
Charitable gifting can be included in your estate plan through outright gifts or by using a trust agreement. If you choose to make outright gifts you can certainly do so in your Last Will and Testament. Gifting in a Will is simple and straightforward. You simply decide what assets, including cash, you wish to give to each charitable organization and then include those bequests in your Will. If you are fortunate enough to have a moderate to large estate, one issue to be aware of is how bequests in your Will could impact any federal gift and estate tax liability.
Another way to include direct charitable gifts in your estate plan is by using the annual exclusion. Using the annual exclusion, every taxpayer is entitled to gift assets valued at up to $14,000 to an unlimited number of beneficiaries each year. Gifts made using the annual exclusion do not incur gift and estate tax nor do they count toward your lifetime exemption limit. If you start early in life, you will be able to gift a considerable amount of asset this way.
Charitable gifts can also be made through a trust agreement. You may choose to create a charitable trust that is used solely for the purpose of making gifts to charitable endeavors. Another option is to create a charitable lead or charitable remainder trust. Both allow you to make gifts to both a charitable and a non-charitable beneficiary. A charitable lead trust allows you to make gifts for a specific period of time and/or in a specific amount to a charitable beneficiary after which time the remaining assets will be distributed to a non-charitable beneficiary. A charitable remainder trust operates the same way but with the non-charitable beneficiary receiving the benefits of the trust first and the charitable beneficiary receiving the remaining assets.
If you have additional questions or concerns about including charitable gifting in your estate plan, or about your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.