Often, people wonder what the best way to make a charitable contribution is. Planned giving is one way in which a person can make a charitable contribution. Planned giving may be done in line with a person's financial plans or through his or her estate plan. However, this type of donation does not necessarily need to be made in the person's lifetime. In fact, it can be made through a Will or Trust by designating the charity as a beneficiary and thereby taking effect after a person passes away.
Furthermore, if assets will not be left until death, assets which comprise of Income in Respect to a Decedent (“IRD”), like an IRA, make good assets to leave to charity. IRD assets do not get a step-up in basis at the death of the taxpayer. But, a charity will not pay tax on the IRD asset, while a non-charitable beneficiary would pay tax. Thus, an IRD asset is worth more to a charity than it is to a non-charitable beneficiary.
It is important to make sure that any charitable contribution is made to a validly recognized organization and that the organization is one in which the person giving the gift has a true affinity for.
Peter A. Moustakis is the founder of Moustakis Law LLC
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Please note that the information contained in this blog is not an exhaustive list of the matters pertaining to the discussion. Every person has a unique situation that must be tailored with the advice of an attorney after consultation. The material published on this blog is made available by the Moustakis Law LLC for informational purposes only and should not be considered legal advice. Before you make any decision that may have legal implications, you should consult with a qualified legal professional for specific legal advice tailored to your situation. Your visiting this blog does not establish an invitation to enter into, and does not create an attorney client-relationship.