Help Create a Legacy That Lasts With Charitable Giving

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Key Takeaways

  • Choosing a charitable giving strategy depends on factors such as the needs of the charity, timing of the gift, control over assets, income needs, tax deductions, and family considerations.
  • Different strategies like lifetime gifts, gifts by will, charitable lead trusts, private foundations, and wealth replacement trusts offer various income and estate tax benefits.
  • Life insurance can be a cost-effective way to make a lasting charitable gift, allowing for larger contributions and potential tax benefits.
  • In some cases, it may be more tax-efficient to donate assets like retirement accounts instead of life insurance.
  • Consult a financial professional to understand the specific tax considerations and create a customized charitable giving plan.

People leave money to charities for many different reasons: generosity; religious beliefs; gratitude; hope for a better future. There are many reasons for charitable giving and volunteering — and the federal government encourages it by offering tax deductions for charitable gifts.

Whether you're wealthy or of more modest means, charitable giving may be a significant element in your estate plan.

Choosing a Charitable Giving Strategy

Choosing the strategy that's right for you depends on many factors, including:

  • The needs of the charity you want to support;
  • Whether you will make a gift to charity now or later;
  • Your desire to control the asset during your lifetime;
  • Your need for income;
  • Your ability to use tax deductions; and
  • Your family's asset and income needs.

A Variety of Charitable Giving Strategies

Many different strategies are used to make gifts to charities. Different strategies can result in different income and estate tax benefits.

  • Lifetime Gift
  • Gift by Will
  • Charitable Lead Trust
  • Private Foundation
  • Wealth Replacement Trust

Life Insurance in Charitable Giving

Life insurance can be a sensible and cost-effective way to give a lasting gift to charity. It may allow you to make a far-larger charitable gift than may otherwise be possible. Gifts can be of existing policies or the charity can be named as the beneficiary of your life insurance policy. By making the charity the beneficiary of the life insurance policy, they may receive a far-larger benefit than they would have if they had just received the annual premium amount each year.

In some cases, it may be more tax-efficient to give other assets—like retirement accounts—to charity. In these cases, life insurance may be able to be used to replace the asset given to charity.

Tax Deductions May Be Available

A federal tax deduction may be available for some, or all, of the value of the charitable gift. For income tax purposes, the amount that can be deducted in any year depends on several factors, including the type of asset transferred to charity, the nature of the receiving organization, the amount of your adjusted gross income and overall itemized deductions. Your financial professional can provide more details on the income tax considerations of a charitable gift.

Doing for others is much easier with a customized, structured program that accommodates your charitable giving goals and your personal needs for your family. Consider all of your options, and talk with an financial professional today.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.