Giving back to charity and the community is a very noble thing a person can do in their life. It can change the lives of others in ways many do not realize. However, there are many people who are unable to do so out of their own pockets. It is because of this that charitable planning can be established. This is done through an estate plan that allows a person to give back in other ways. If you want to include charitable planning in your estate plan, contact an experienced New York estate planning attorney for assistance.
What is Charitable Planning?
Charitable planning can be taken care of in several different ways. This can include designating beneficiaries within an estate plan, bequests in wills or trusts, and even lifetime gifts. A person’s life insurance policy or their retirement plan can be used as a tool to give a lifetime gift or bequest on death to a charity or non-profit organization. Usually, people choose to either gift their insurance policy itself or a portion of its proceeds when they pass away. This is accomplished through a “beneficiary designation.”
It is important to be aware of any tax provisions when establishing a charitable plan. This is because certain charities, such as qualified charities, do not have to pay income tax on any gifts provided from retirement accounts. These funds are more valuable to charities instead of other assets that come from an estate. In order to make an informed decision and ensure your assets are going where you want them to, retain the services of an estate planning attorney to guide you through the process.
What is the Function of a Charitable Trust?
There are two different types of charitable trusts that a person can create in order to carry out their wishes in the state of New York: This includes the following:
- Charitable leads trust: When parts of the trust assets are distributed to charities over a period of time. After this period of time passes, the assets remaining in the trust are distributed to the deceased’s beneficiaries. This may either be tax-free or with significant tax savings.
- Charitable remainder trusts: When a portion of the individual’s income is distributed either back to the creator of a trust or its designated beneficiary. The remaining assets will be given to charity upon the creator of the trust’s passing.
Contact our Firm
If you or a loved one needs assistance creating an estate plan and wish to speak with an experienced attorney, contact the Law Office of Andres D. Gil, PLLC today.