From tax perks to ensuring that a cause you support is furthered, there are many benefits to leaving your Minnesota estate to charity. However, there are also some important considerations you should take into account before doing so.
Why Should You Leave Your Estate to Charity?
Generally, there are two reasons people choose to leave their estate to charity: altruism and tax benefits. Giving your estate to charity ensures that your legacy will be furthering a cause you believe in. The financially practical argument for leaving your estate to charity is that in doing so you can save significantly on income and estate taxes.
Should You Give to an Existing Charity or Establish Your Own Foundation?
In deciding whether to give to an existing charity or establish your own, you should discuss with an experienced Minnesota estate planning attorney how much effort you are willing to put forth as well as how many causes you want your estate to benefit. It is generally less work to give to an existing charity, as they already have an infrastructure, staff, and programs. However, one downside of giving to charity is that most generally support only one cause. Establishing your own foundation allows you to support many different causes that you believe in. It also means, however, that you will need to hire staff, recruit a board, draft governing documents, and more.
Donating to an existing charity can secure you a significant tax write-off. Additionally, establishing your own foundation can mean you save substantial amounts on estate, capital gains, and income taxes. Again, it is best to discuss your options with an experienced Minnesota estate planning attorney before making any decisions.
How Do I Know if a Charity is Reputable?
The last thing you want to do is trust your life’s savings with a charity that is not going to use or invest it appropriately. Many reputable charities will post their financial reports on their website, and these reports are also often available on websites like GuideStar. The reports should give you a picture of the charity’s assets and accounts, as well as how much they spend on staff and overhead versus mission-oriented programming.
If a charity’s financial reports are not readily available either through their website or through an online report database like GuideStar, you should ask a charity to share their reports with you in light of the fact that you are considering making a charitable bequest to them. Many are happy to accommodate potential donors in this way, but if a charity refuses to share their reports with you, it is time to look for a different charity. A Minnesota estate planning attorney can also help you sift through these documents to assess whether your funds will be wisely invested with a charity.
Questions About Leaving Your Estate to Charity?
A charitable bequest of your estate can be a meaningful legacy, but before you commit to donating to a charity or establishing your own foundation, talk to Chris Tymchuk at Unique Estate Law. Chris has experience in making sure clients’ Minnesota estates are wisely and appropriately managed, and will make sure you have all the information you need to make an informed decision. Contact Unique Estate Law today.