Donating part or all of your estate to a non-profit will not only benefit the charity but could reduce the amount of estate taxes your heirs have to pay on your estate. Here's how to do it.
- Deciding What, to Whom and How Much to Donate
- Determine which non-profit you want to support.
- Consult an attorney who specializes in wills and estate planning. He will advise you on the different ways to make your donation. For example, you could make an outright bequest, name a non-profit as the beneficiary on your retirement benefits or set up a charitable trust.
- Decide how much money you want to leave to the non-profit. This decision may be affected by the advice you receive from your lawyer and financial planner. If your estate is valued high enough to be taxed, a charitable donation may reduce the amount of taxes owed or decrease the value of your estate so no taxes are levied.
- Bequeathing Money - Decide which type of bequest you will make: general or outright, specific, residuary or contingency. Decide how much money you will donate. Have your lawyer include your bequest in your will.
- Naming a Charity as the Beneficiary of Your Retirement Benefits - Decide whether you want to leave a percentage of money from your IRA or retirement plan to the non-profit, or if you want to leave the entire amount. Contact your IRA or retirement plan representative to make the appropriate changes to your beneficiary listings. Check with your attorney to see if you need to adjust your will to reflect the changes made to your IRA or retirement plan.
- Creating a Charitable Trust - Consult a financial planner or an accountant to determine which type of charitable trust to set up: a charitable remainder annuity trust (CRAT), a charitable remainder unitrust (CRUT), a pooled income fund or a charitable lead trust. Decide what the principal amount of the trust will be. Meet with your lawyer to have the provisions for your selected trust placed in your will or included as an addendum to it.
Courtesy of www.ehow.com