Where There’s a Will, There’s More Than One Way to Be Charitable

Posted January 2021

One of those New Year’s resolutions, while not as widespread as losing weight, is pretty common: Time to write or update the will! We all know we should be doing this, since a will is the bedrock of any person’s estate plan. It can give direction on the final disposition of your assets—and benefit your loved ones and the charitable organizations that you value.

As you consider drafting or updating your will, it is important to keep in mind just which assets your will can—and can’t—control. Simply put, your will controls only the distribution of assets the disposition of which is not already determined in some other way. For many of us, those other assets may actually be the majority of what we own. So what are some of the assets that can pass outside the will?

  • Jointly held property
  • Trusts
  • Retirement-plan accounts
  • Life insurance
  • Accounts with financial institutions

So is a will still necessary?

Because there are multiple ways your property can be inherited, you may be tempted to think that you don’t need a will at all. Even though many—and in some cases most—of your assets may pass outside a will, there are, however, important reasons to execute a valid will:

  • Appoint a guardian for a minor child
  • Account for distribution of unexpected or unknown assets
  • Start the clock running on time for creditors to claim against the estate

Charitable planning with your will and beneficiary designations

Charitable bequests are among the oldest and most important types of gifts received by many charitable organizations, including ours. It is easy to include provisions for our organization in your will—and those provisions can be modified at any time during your lifetime.

It is also possible—and not complicated—to name a charitable organization as a beneficiary of all or a portion of your trust, bank or investment account, retirement-plan account, or life insurance policy. 

It can be quite beneficial to fund charitable gifts with qualified retirement-plan benefits and then direct other assets to family members. REASON: Most, if not all, of such benefits passing from your estate are treated as taxable income to the recipient; but, because we are tax-exempt, we would not pay tax on those amounts.

We want to help

Making decisions about the ultimate distribution of your assets is a vitally important undertaking. It should be undertaken carefully and with the guidance of trusted professionals. If we can be helpful in any way in the process, please feel free to contact our office.
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