Planned Giving: How Much to Leave to Charity?
Suppose you want to leave something to your favorite charity upon your death. Should you give the charity a percentage of your estate, or a flat dollar amount?
If you choose the first option, your will or trust might include a provision that says that 10% (to pick a number) will go to your charitable organization of choice. On the other hand, you might leave, say, $10,000 to that charity. If you anticipate having an estate of about $100,000 is there a difference between those two?
Yes. In the first instance, if you die with only $40,000 the charity will receive just $4,000 -- and if you win the lottery you might be leaving a much larger amount to the charity. On the other hand, if you designate a flat dollar amount that will usually be distributed first -- so that your $10,000 gift will mean your entire estate if you die with only $8,000.
You can choose a combined approach. You might say, for instance, that you leave $10,000 (but not more than 20%) of your estate to charity. That makes sure that your charitable gift remains significant even as your estate shrinks, but protects against accidental disinheritance of your family and friends.
Robert B. Fleming
Fleming & Curti, PLC