What are some options to give to charity?

On Behalf of | Feb 6, 2020 | Estate Planning

If you are eager to donate part of your wealth to a cause you are passionate about, there are a number of ways you can give to a charitable organization. Not everyone donates to a cause in the same way. For instance, some people prefer to donate material property to a charity as opposed to cash. Some methods even allow you to provide for loved ones in the process of giving to charity.

As explained by Forbes, people sometimes choose to donate cash or tangible objects to a favorite charity. Donating cash is often not difficult since many charities take cash, with some also accepting stocks and bonds. Matters become more complicated if you want to donate material possessions since not all charities can accept assets like real estate or valuables like works of art.

In some cases, donors can work out an arrangement to give a cash gift or material assets to a charity, with the charity paying the donor an annuity in return. Known as a charitable gift annuity, donors benefit from this option because they may receive the annuity for life. Also, in many cases, the donor can take an income tax deduction on the difference between the value of the annuity and the gift to the charity.

If a charity can accept a donation, a donor may give a piece of property through a retained life estate. Using this method, a donor may gift a piece of property, whether a farm, a house, or other kind of property, but still occupy the property for a period of time. The donor may live at the property for a specified term or for the rest of his or her life. At that time, the charity takes full control of the property.

Charitable givers also have the option of setting up a charitable trust. With a charitable remainder trust, you can benefit both a charity and loved ones at the same time. A charitable remainder trust allows you to give money to a beneficiary or even to yourself for a period of time, and at the end of the period the charity receives the remainder of the trust money. On the other hand, a charitable lead trust allows the charity to benefit first, with beneficiaries receiving the remainder of the trust money by the end of the term.