The capacity of our fellow citizens to be charitable and giving during this devastating pandemic is perfectly encapsulated in this one small story.
A retired farmer from northeast Kansas found in his house five unused N95 respirator masks – the kind of face masks that health care workers need to protect themselves when caring for infected patients. The farmer and his wife are both in their 70s, and his wife suffers from a number of health problems including only having one lung.
The farmer kept four masks for his immediate family but had one leftover that he knew he would likely not use. What to do with the fifth mask? Knowing that at the time New York State was the epicenter of the COVID-19 pandemic in the U.S., the farmer sent it to New York Governor Andrew Cuomo with a handwritten note:
“Enclosed find a solitary N-95 mask leftover from my farming days. It has never been used. If you could, would you please give this mask to a nurse or doctor in your state?”
Cuomo read the letter at his next daily briefing, pointing out that it was a beautiful example of how giving and selfless people can be during a time of crisis.
That is what charity is all about.
“Giving Tuesday” was Just Last Week
As the saying goes, “giving is the greatest act of grace.” One day last week, on May 5th to be exact, was designated as “Giving Tuesday,” a day dedicated to encouraging people to donate to charities and companies that are supporting COVID-19 relief efforts.
Even though the day just passed, we at Doane & Doane hope that you do not let the opportunity pass you by. Please participate, even after the fact, in Giving Tuesday, but making a donation to a charity that is working to fight the COVID-19 virus. You will be happy you did. And, you can even do so as part of your overall estate plan.
Charitable Giving in Your Estate and Tax Planning – Three Ways to Make It Happen
In the spirit of “Giving Tuesday” we thought that we would focus this article on how you can include charitable giving into your overall estate plan, and even enjoy some tax benefits along the way. Accordingly, we will discuss three ways in which you can incorporate charity into your estate planning.
If, after reading this article, you are inspired to make sure that your estate plan includes charitable giving, we welcome you to contact us at Doane & Doane, PA. Call today at 561-656-0200 or fill out our online contact form.
Of course, giving to charity is not about gaining tax advantages, but that is a pleasant tangential benefit. Here are three ways you can structure charitable giving into your own estate plan.
#1 – Qualified Charitable Distribution
Those who are over 70 and one-half years old can use funds from their Individual Retirement Accounts (IRAs) and donate up to $100,000 per year to charity. This donation, known as a Qualified Charitable Distribution counts towards any required minimum distribution that the IRA holder must take from his or her IRA.
Indeed, there are many benefits to this type of charitable giving in your estate plan:
1. You are giving to charity (the most important goal);
2. You fulfill your required minimum distribution from your IRA; and
3. The money is not considered income for tax purposes.
#2 – Include a Charity in Your Will
Of course, as you may expect, the easiest and most direct way to give to charity through your estate plan is to leave funds to a charity in your will or in your revocable trust. You may identify the specific charity that should get the money, and even state the purpose for which you would like the charity to use the money.
#3 – Help Charity and Family with a Charitable Remainder Trust
By creating a Charitable Remainder Trust (or CRT), you can benefit both the charity of your choice and a family member. Here is how it works. You create a CRT and make it the beneficiary of your IRA. The CRT is a split-interest trust, meaning that you choose the family member who should receive annual payments from the CRT for a specified period of time. Once that time has elapsed, and the family member’s interest in the CRT ends, then the remaining amount in the CRT is giving to the charity of your choice.
You want to make sure that you consult an experienced estate planning attorney to assist you with a CRT to ensure that you follow the many rules that regulate CRTs.
Why use a CRT? Because the CRT itself is, similar to a charity, a tax-exempt entity. Thus, when you pass away, the funds that go into the CRT are not taxable. The family member who receives annual payments from the CRT, however, will need to claim those as income.
In sum, these are only three examples of the many options you have in incorporating charitable giving into your estate and tax planning. To ensure that you know all of your charitable giving options, call a seasoned estate planning attorney today.
Look to Doane & Doane for Help When Adding Charitable Giving to Your Estate Plan During the COVID-19 Crisis
Founded in 2003 by husband and wife legal team, Randell C. Doane and Rebecca G. Doane, Doane & Doane provides legal and financial services to families, individuals, and businesses throughout southeast Florida.
Estate planning is about much more than just giving away property. It is an act of love and kindness, with the ultimate goal of providing for the future financial security of your loved ones and/or the charity of your choice – particularly during the COVID-19 pandemic.
At Doane & Doane, our attorneys help people plan for retirement, make provisions for loved ones, and minimize tax liability. Our experienced estate planning attorneys know which tools to use to get the best results for their clients. Our lawyers can help you determine which tools are best suited to your specific circumstances.
In addition, when it comes to probate matters, such as the formal administration of an estate, Florida fiduciaries seek the assistance of the attorneys at Doane & Doane, P.A. to administer and manage their trusts and estates. Notably, the founding partners of Doane & Doane are board-certified West Palm Beach Probate Attorneys. With the additional advantage of certified public accountancy in their backgrounds, they present a unique combination of skills and experience which enables them to effectively settle, administer, and manage clients’ trust and estates.
Call us at Doane & Doane, P.A., for estate planning services in Florida. You can reach us at 561-656-0200. Call us today.