When you are gone, you want your estate to provide for families and charities that you cared about. Part of estate planning is deciding what you want to give now as well as after you are gone.
Benefits of Giving Now
Giving now may help in reducing the tax burden on your estate once you are gone. If you are sure that you are not going to outlive your assets, then giving both to family and charity are options. Some things to consider about taxes:
- You may pay medical or educational expenses at no tax cost, as long as the money goes directly to the institutions.
- You may gift up to $14,000 per year to as many people as you would like. If you give more than this to any one person, you must file. Any amount over the 14,000 will be counted against your estate tax exclusion.
Giving to Charity
If your estate is large enough to create a tax concern, another way to lower the tax burden is to donate to a charity or charitable fund. There are many types of gift funds available, and all donations to these funds are tax deductible. Reputable companies like Vanguard and Fidelity typically operate these kinds of funds.
Another option is to set up a charitable trust. Doing this, your heirs can receive the principal from the trust, while the charities receive the income.
There are a lot of options if you choose to give now. Speak to your legal or financial planners today to see what might be right for you.
