While it is most common to make charitable donations throughout your lifetime, smart people understand the benefits of leaving contributions to charity in their will. Writing charities in your will not only feels altruistic and may ensure your legacy, but there are also significant tax benefits for the estate and your heirs.
Charitable bequests, whether assets or items, are typically deductible from the estate’s taxable income, reducing the overall tax burden. While many people leave financial donations to charity in their will, many other surprising things can be left to charity. Here are 15 things smart people only leave to charity in their will.
1. Money and Financial Assets
Cash, stocks, bonds, or other financial assets are commonly bequeathed to charitable organizations to support their missions and programs. When leaving stocks and bonds to charity in your will, you can allocate all or some of the assets to the charity of your choice.
2. Real Estate
Property such as houses, land, or commercial buildings can be left to charities to use directly or sell for funding their activities. Leaving your home to charity can also lessen the burden on children if they do not wish to keep your house.
3. Artwork
Valuable paintings, sculptures, or other artwork may be donated to museums or arts organizations to enrich cultural heritage and support the arts. However, not all museums will accept your art, so planning is necessary.
When the museum receives your collection, your estate will receive a tax deduction based on the collection’s current valuation.
4. Season Tickets
Many charitable organizations use ticket donations to raise money for their organizations through silent auctions. Leaving your season tickets to your favorite charity could put them to good use.
5. Vehicles
Cars, boats, or other vehicles can be donated to charitable organizations, which may use them for their operations or sell them to raise funds. Most people wouldn’t consider leaving a car to charity, but many organizations like Cars for Kids run their entire charity on car donations.
6. Jewelry
Donating jewelry to charity can be beneficial not just for its monetary value, but in some cases for its historical significance. If your fine jewelry is antique, you may consider donating it to a museum.
7. Collections
Whether it’s stamps, coins, books, or other collectibles, individuals sometimes leave their collections to charities that can benefit from them, such as libraries or historical societies.
8. Personal Property
Furniture, antiques, household items, and other personal belongings may be donated to charities that support individuals in need. Organizations like Goodwill and Salvation Army will pick up furniture from your home. Donating your furniture may be especially helpful if your heirs plan to sell your home.
9. Life Insurance Policies
Some people designate charitable organizations as beneficiaries of their life insurance policies, providing financial support to the organizations upon their passing. To do so, you must notify the charity of your choice that they are a beneficiary ahead of time. Some insurers don’t allow this, so check to see if this is possible.
10. Retirement Accounts
Individual Retirement Accounts (IRAs) or other retirement savings accounts can be left to charities, potentially providing tax benefits to the estate and supporting charitable causes. Donating to a charity in this way in your will is also beneficial to the charity since they don’t have to pay income tax on any of the proceeds.
11. Business Interests
Entrepreneurs and business owners may leave shares of their company or other business interests to charitable organizations, contributing to causes they care about.
12. Intellectual Property
Copyrights, patents, or royalties from books, music, or other creative works can be assigned to charitable organizations, benefiting them long-term.
13. Donor-Advised Funds
A donor-advised fund is an account created specifically for donations to charity. To set this up, you first irrevocably contribute assets such as cash, stock, real estate, or private business interests to the fund. Then, you and your family can make grants to your chosen charities while you’re still alive and after you die.
Assets in the fund may grow over time, making more money available for the charity of your choice. You also receive a tax write-off in the year the gift is made. A donor-advised fund is also appealing because the list of charities that benefit can be changed. According to the National Philanthropic Trust, donor-advised funds held $234.06 billion in assets in 2021.
14. Animal Assets
Pet owners may leave assets or set up trusts to ensure the care and well-being of their pets, with any remaining funds going to animal welfare charities.
15. Education Funds
Scholarships, grants, or educational endowments can be established in your will to support students in need or educational institutions you care about, such as your alma mater.
Benefits of Writing Charities into Your Will
Leaving items to charity in your will is a meaningful and financially smart way to leave a legacy. Whether supporting humanitarian causes, advancing education and the arts, or preserving the environment, charitable bequests allow individuals to continue their philanthropic efforts beyond their lifetime. Smart people leave more than just money to charity in their wills, but instead understand the full gamut of possible donations.
Due to the complex nature of estate planning, it’s always a good idea to consult a legal professional to walk you through the best way to make charitable donations in your will.
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