If you do not have any heirs or simply want to give your money away to those in need after you die, there are ways to bequeath your income and assets that can also provide you with financial benefits.
Once you decide that you want to disseminate your money and property to a charitable organization, you need to create an up-to-date list of all of your personal assets. After you complete this task, make an appointment with an estate planning law firm to discuss the following donation options.
Donating Your Retirement Accounts
If you desire, you can donate the remaining portion of your 401(k), individual retirement accounts and other types of savings when you die. The federal government taxes retirement income that passes down to your heirs. However, if you donate these assets to charitable organizations, the retirement funds will not incur taxes. You will be able to give all of your retirement money tax-free to a charity.
It crucial to get legal advice when you leave retirement income in order to make sure the beneficiary designations are accurate in your will, especially if you want to leave assets to more than one charity. If the beneficiary designations are missing crucial information, your assets may not get distributed according to your wishes.
Bequeathing Your Property to Charity
Another way to provide something meaningful to your favorite charity after you die is to donate your property. In addition to leaving a valuable and tangible asset, your heirs will also be freed from paying the inheritance taxes on the property.
If you have already retired and plan to move to a senior community, you can donate your primary home while you are still alive. First, you should get an appraisal of your home so you know its value on the market. After you determine the home's value, your attorney can help you set up a charitable remainder trust.
You turn the property over to the charity and they will put the house on the market. When the home is sold, the proceeds will go into the charitable trust fund. This fund will provide you with a monthly stipend until you die as well as collect interest. When you pass away, the remaining balance of the trust goes to the charity.
In addition to talking to an experienced estate planning attorney about your donations, you should also make an appointment with the person in charge of planned giving at the charity you want to help to let them know of your plans.