There are many things to consider when constructing one’s will, and one of the most important aspects to think about is who to leave assets to - and how those assets will be used.
A gift made to someone as part of a will is called a bequest. Bequests don’t just have to go to people – they can also go to charitable organizations. A bequest to a charitable organization offers some advantages to both the donor and the recipient, including flexibility, tax advantages, recognition, and efficiency.
Looking at the tax benefits, gifting assets to a charity can help a donor avoid paying estate tax.
Property left to non-profit organizations is exempt from estate taxes meaning leaving your most tax-expensive assets to a charity can be a powerful way to reduce the amount of your estate subject to tax. Gifts can be cash, real estate, stocks, IRAs, automobiles, equipment, and more.
As always, consult with your accountant, financial planner, and attorney to determine what is best to leave to your charity (or charities) of choice and what is best to leave to your loved ones.
By doing so, you can minimize taxes while maximizing the legacy left to the people and causes you care about most.
Jack Furlong, CFP®, APMA, BFA, is a Certified Financial Planner at Ameriprise Financial Services in Hibbing and Virginia and has served on UWNEMN's Board of Directors for four years.
Learn more about leaving a legacy with United Way of Northeastern Minnesota