What are the tax implications of making a bequest?
Are you considering leaving money to a charity or charities in your will? This can be a great way to leave a legacy while also saving your heirs quite a bit in estate taxes by reducing the size of your taxable estate. One thing to keep in mind, however, is that a gift today also automatically reduces your estate.
If your desire to reduce your estate by leaving money to a charity in your will is keeping you from making donations today, remember that you can also gain charitable tax benefits by making the gift now. If you are more concerned with saving money for your children or other heirs, a bequest in your will may be the best option. If you are in a financial situation that allows you to give now and in your will, you can realize tax benefits for yourself now and your heirs later.
If you want to give to charity from your pension plan account or IRA, you can save income and estate tax by making these gifts through your will. Even after your death, the person or who receives the pension or IRA money has to pay income taxes on that money unless the recipient is a charity.
If you have already provided well for family members, a posthumous gift of a pension or IRA to a charity both reduces your estate and helps reduce estate taxes and avoids the income tax that your heirs would have to pay upon receiving these accounts. This is, of course, a simplification of the various issues related to planned giving and tax benefits.
*Be sure to get personalized and professional advice from someone sophisticated in this area.
Charity Frequently Asked Questions
What services do animal charities provide?
What are modern animal shelters like?
What is the ASPCA's mission?
What services does the American Humane Society offer?
What should I consider before adopting or rescuing a pet?
What does the World Wildlife Fund do?
What are the dimensions of charity?
How does the charitable market differ by nation?
Why should I donate my money, time or goods?
How should I go about deciding which charities to support?
What do breast cancer charities do?
What are some high-profile breast cancer charities in the United States?
How can I support the fight against cancer?
How can I help stop the spread of HIV/AIDS?
What are some international service agencies I can support?
Why do nonprofit organizations have so many fundraising campaigns?
What do my donations to annual campaigns fund?
What is a capital campaign?
What is an endowment campaign?
What role do special events play in charities' fundraising activities?
Should I buy these new charity wristbands?
Are there objective bodies that report on charities' activities?
Do charities have to disclose their operating records?
Where can I find out more about how a charity operates?
How can I support children in the United States and around the world?
What are some organizations that provide services to children and families?
What is the digital divide?
Why does the digital divide matter?
Does the digital divide only affect people and the countries in which they live?
How can I help bridge the digital divide?
What is disaster relief?
Who participates in disaster relief and recovery efforts?
What are the phases of disaster relief and recovery?
What kind of disasters need relief?
What are the different ways to donate money to charitable organizations?
Do I have to give a large gift to make a difference?
Why should I donate blood?
Why should I become an organ donor?
How can I help sick kids?
Is my old cell phone something I can donate?
Can my old computer be used by schools or charitable organizations?
What is the best way to donate a computer?
What should I do when donating a computer?
What do environmental charities do?
What organizations promote conservation and environmental protection?
Are homeless charities meeting current needs or helping homeless people become self-sufficient?
What does the National Coalition for the Homeless focus on?
How does America's Second Harvest address hunger and homelessness in the United States?
How does the Enterprise Foundation support community development and fight homelessness?
How can I help combat homelessness?
What are some organizations that are involved in international relief programs and efforts?
What does the term "nonprofit organization" refer to?
How can I plan to support my favorite causes through a bequest?
What are the tax implications of making a bequest?
Where can I get more information about planned giving?
How can corporations contribute to charitable causes?
What are the tax benefits of corporate giving?
Why should companies donate to charity and community causes?
What should I look out for when deciding to which charities to give?
What can I give to charitable causes?
How can I get involved without spending a lot of money?
How to I get to know the organizations I am considering supporting?
How to I teach philanthropy to my children?
What is philanthropy?
What are some smart things to do as I plan my charitable giving?
What is substance abuse?
How can we help prevent and reduce substance abuse in our communities?
How do charitable organizations help people with dependency issues and their families?
What are some organizations that provide substance abuse prevention and treatment services?
How can I help people with substance abuse issues?
What are missionaries?
How do I find a volunteer opportunity?
Are there volunteer opportunities that are not "in person" opportunities?
What role can online volunteers play?
How can I find an online volunteer opportunity?
Can I volunteer my technology skills?
What do I need to do to be a good volunteer?
What skills could I offer an organization?
How can I help charitable causes if I don't have a lot of money to donate?