Legal

Charitable Giving With Your Estate Plan

By Libby Banks, The Law Office of Libby Banks, PLLC

September was Childhood Cancer Awareness Month. One of the charities I support, Amanda Hope Rainbow Angels (amandahope.org), is an organization supporting children with cancer and their families in a variety of wonderful ways.

Working with Amanda Hope Rainbow Angels this past month on their annual gala made me think about how we can give to charities when we do estate plans, benefitting the charity and giving us tax advantages.

1. GIFTS FROM A 401(K) OR TRADITIONAL IRA

Your contributions to your 401(k) or IRA are pretax money. You or your individual beneficiary will pay taxes when the money is withdrawn. A charity, on the other hand, will not pay taxes if they are the beneficiary. If you are including a charity in your estate plan, be sure to consider giving by making them your IRA or 401(k) beneficiary.

2. GIFTING YOUR REQUIRED MINIMUM DISTRIBUTIONS

Another option for giving is to make a direct gift of all or part of your required minimum distributions to the charity. Individuals who are at that point of being required to take RMDs can give up to $100,000 from an IRA to a charity tax free. If you are already making gifts to a charity each year, this can be a way to benefit your charity to a greater extent and save yourself taxes.

3. CHARITABLE REMAINDER TRUST

A charitable remainder trust allows the donor to give assets to an irrevocable trust, which provides income to an individual beneficiary for a period of time and gives the remainder of the assets to charity at the end of that time. The trust will permit a donor to claim an immediate charitable deduction for the value of the assets that will ultimately pass to the charity.

About Amanda Hope Rainbow Angels

As I mentioned in my opening, Amanda Hope Rainbow Angels assists children with cancer and their families. Imagine having a child with cancer – and then throw COVID-19 on top of it, maybe resulting in job loss. Your other children need more of your time, and now you have to socially distance yourself from many of your close friends and family who’ve been your support. It’s been really tough for these families. Amanda Hope has continued to serve them, but in these times can use more help. The Annual Gala, which is one of their biggest fundraisers, has moved to a primarily virtual event. To support them this year, I created Team “Be the Change” to raise money in connection with the virtual gala. If you are interested in making a donation, here is the link to the website: tinyurl.com/LBCancerhelp. Thank you in advance for your help.

If you are interested in charitable planning for your estate, we are here to help. Call the Law Office of Libby Banks for an appointment to discuss your options at 602-375-6752.

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