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31 May

Ways to Include Charitable Giving in Your Plans

On: 31st May, 2016   //   By: admin

Tips for Including Charitable Giving as a Part of Your Legacy

While it’s common to leave your wealth to your children and grandchildren, many people also have interest in leaving a legacy by including charitable giving in their plans. If you have a cause you are passionate about, you may want to consider including a gift that provides a boost to a selected charity or group of charities. It’s a great way to continue the work of your life after you’re gone.

Here are three tips for including charitable giving in your wealth management:

  1. Make it clear in your will. One of the most effective ways to achieve your goals for charitable giving is to make clear instructions in your will. It guarantees that your chosen charity or group of charities receive the money as you’ve intended.
  2. Give retirement assets. This is another simple way to funnel money into a cause you believe in. All you need to do is list your chosen charity as the beneficiary on any investment asset. Whether it’s an IRA or another type of asset, you can easily transfer the wealth to your cause. Even better, charities are exempt from both income taxes and estate taxes, so they receive 100 percent of the assets.
  3. Consider a split-interest gift. When you choose a split-interest gift, you open and fund a trust in the charity’s name and receive a tax deduction at the time of the transfer. This may be a good choice for you because it allows you to retain some of the rights of ownership, but reduces the total value of your estate and may enable you to avoid paying capital gains taxes on earnings.

It may seem that a split-interest gift is only applicable in the case of those that have significant wealth. However, anyone that would like to contribute even a small amount of their retirement wealth to a charity can do so.

Ask your wealth advisor about using one of the following types of split-interest gift options:

  • Charitable remainder trust (CRT)
  • Charitable lead trust (CLT)
  • Pooled income fund (PIF)

No matter which option you use for contributing part of your wealth to a cause, be sure to communicate to your children your intentions for charitable giving. It’s always a good choice to communicate with your beneficiaries about your plans, but particularly in this case, it’s helpful for them to hear about your plans. This gives them a chance to ask questions about your chosen charity or cause and possibly even join you in embracing it.

The staff at Aura Wealth Advisors is experienced at helping clients not only build retirement wealth and manage investments, but also at working with clients through a wealth transition. Call Aura Wealth Advisors for an appointment to learn more.

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