Making a Charitable Gift - Now or Later?
Attorney Robert B. Fleming and his dog, Odin
Do you want to leave (or give) something to a favorite charity? Does it make more sense to add the charity to your will or trust, or to make a gift while you are still living?
When you include a charitable gift in your will or trust you will still have access to those funds for the rest of your life. That may be important to you, and in that case you should make your gift effective upon your death.
One common reason for charitable gifts is to take advantage of tax benefits. Unless your estate is very large (more than $5 million, in most cases), there will be no tax savings for your estate if you make the gift effective at your death. In that case you might want to consider making a lifetime gift to that charity – and perhaps spread it out over months or years in order to make it easier on you. Then you can deduct your charitable gift on your income tax returns.
There are even ways to do both at the same time, though they work best for larger charitable gifts. You can make a gift that becomes fully effective at your death, allows you to receive a stream of income for your life, and permits a present income tax deduction for a portion of the gift. Talk with your lawyer about how to accomplish that result if you want to pursue it.
Robert B. Fleming
Fleming & Curti, PLC