Leaving a Legacy

If you have considerable wealth — and even if you don’t — you might wonder how to leave a financial legacy behind for a beloved organization or favorite charity.

Giving USA found that giving by individuals grew at a higher rate than other sources of giving in 2016. Individuals gave an estimated $281.9 billion, a 3.9% increase from the prior year. With major fundraising efforts in 2017 for victims of the rash of natural disasters in North America, the pace of giving may not slow soon.

How to Give

When you decide to give away assets, it’s a good idea to make sure you have current information regarding the rules. For example, on the federal level, individuals may give up to $15,000 to as many people as they want free of gift tax.

If you’re short on cash, gifts of appreciated assets like stocks can help organizations that accept them. Individuals can also name charitable organizations as beneficiaries of life insurance policies.

Giving and Getting

Even with the most altruistic intentions, you can structure a gift to benefit both your family and a charity. Gifts of assets and cash made to a charitable remainder trust (CRT) can provide lifetime income for you and a loved one, income tax advantages and eventually needed funds for a charity.

The CRT can specify how long an income stream will last and when the trust’s term will end, upon which assets will pass to the charitable organization named in the trust. One caveat: Make sure you are okay parting with any assets you intend to pass to a CRT, which is an irrevocable trust. Once you make the transfer, your decision is permanent.