As the end of the year approaches, we look to open our wallets and hearts. Not only is giving to a charity good for the recipient of the gift; we usually feel that the gift we gave was more meaningful than if we would have given to ourselves. Did you know with strategic charity gifting you can also plan your estate.
“Plan for my Estate? I thought that is something retirees do?”
Estate planning is NOT an activity for retirees. Estate planning is an activity for everyone that has any assets they would like to protect and carry out your final wishes. While facing final wishes it isn’t a pleasant thought, however, final wishes are the main reason for having your estate planned. While estate planning involves what will be done after you are no longer around; we are going to focus on how you can save taxes for your estate through charitable gifts.
One great way to save on taxes is gifting to a reputable charity. For more information on how to choose a charity, we have a couple of blog posts here, and here. In order to benefit from gifting to a charity, the transfer mus occur before December 31st. Meaning, if you were to give money, or a physical gift the recipient must have recorded the gift as received in full by the end of the day on Dec 31st. However, if you sent a check the deduction by law will be recognized when the check was cashed, not when the check was written. Also, you may choose to donate an asset that is appreciating in value. Donating an appreciating asset will help you avoid capital gains tax that would normally be applied upon the sale of the donated property.
Do you have a question for the KS-Law team? Leave us a comment or send an email. We offer free consultations so you can be comfortable with us as your primary lawyer team.