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Charitable Gift Planning - Not Just for the Wealthy

| June 19, 2017

Ever thought about leaving a significant gift to a charity at the end of your life – but most of your assets aren’t in cash and you don’t know how? Or maybe you’re afraid that you don’t have enough assets to leave to a charity and your heirs.

The good news: where there is a will there is a way! The bad news: there are too many gifting techniques (methods?) to describe in even one of my longest articles. I will, however, discuss a few ideas that you may be unaware of with regards to charitable planning.

First of all, you don’t have to be dead to make a charitable gift. Through various planning tools, charitable gifts can even be structured to provide you with an income for the rest of your life and allowing you to continue living on your home or ranch. Furthermore, it doesn’t have to be a one-time gift, but can even be structured to allow you flexibility in directing future gifts with the help of your grandchildren every year. Oh, and by the way, did I mention there might be some tax incentives involved with these options?

As you may already know by filing out your tax return over recent years and using the current tax code, the government actually encourages charitable gifting. But did you know that charitable gifting could help you avoid capital gains on appreciated assets and estate taxes in addition to your income tax?

For example, you’ve owned your ranch outright for many years, but have decided to sell out and live off the proceeds during your retirement. However, the land has appreciated drastically over the years and the taxes are going to be quite severe. Charitable planning tools could allow you to avoid capital gains tax when the land is sold, accomplish your goal of living off of the assets during retirement, and arrange to gift the remaining assets to a charity at your death.

Wait! I know what you are thinking: “What about my kids? They aren’t that bad and I don’t want to cut them out completely.” Relax. Though it certainly wouldn’t be a solution for everyone, you may be able to purchase asset replacement insurance that will pass outside of your estate to your heirs. And there are other possible solutions available.

Most folks don’t realize they are able to provide for their charitable goals within their life plan. But surprisingly, many times it may be a perfect tool for their life plan. Remember, it is always about Living Life on Purpose! You only have one chance to do it right; so talk with your life planning consultant about what options could work for your unique situation.