Planning an estate is about more than just money and assets. Estate planning is also about creating a legacy for many in California. This means keeping in mind what a person will leave behind for beneficiaries, as well as for the benefit of society. This is why many have decided to incorporate charitable giving into their estate plans.
It is important to be strategic in choosing charities when creating an estate plan. This will ensure that one's charitable donations will go to organizations that will be likely to have a significant positive impact on society. It will be necessary to thoroughly research potential charitable organizations in order to have a better understanding of how one's donated money will be utilized. Some charitable organizations spend more money on administrative costs than they spend on actually helping the causes they are supposed to be supporting.
Of course, another common reason people include charitable giving in their estate planning is the tax benefits. Donations can be deducted from the assets counted as part of one's estate. This can help to reduce estate tax liabilities, which can allow intended beneficiaries to receive more assets. However, in order to create an effective estate tax strategy, a person will need current information on the latest estate tax laws, which change from time to time.
Charitable donations are only one part of estate planning in California. In order to make sure one's estate is administered properly one will have to have the correct legal instruments in place. These may include a last will and testament, trusts, powers of attorney and more.
Source: thestreet.com, "Why Charitable Donations Are Great for Your Retirement and Estate Planning", Jason Notte, June 12, 2015