You have the desire to give back!
Based on your answers, your heart is in the right place, but you could be giving so much more – and securing a financial future for yourself and your loved ones along the way. It’s time to start thinking more strategically about how you give to charity to ensure you’re taking full advantage of tax breaks and donating more money to the organizations of your choice instead of the IRS. Consider tapping an expert in charitable giving wealth management to help guide your decisions around donations. The choices you make today could have a lasting impact on your legacy.
Make the most of your legacy with these three donation strategies you may not have considered:
- Donate your house
Many people say their house is not something their children want to inherit. If you are in that situation, why not consider donating your house to charity? Live in it for the rest of your life and get a current tax deduction for it. What will a charity do with a house when it gets it? It will sell it and realize the value at that time.
- Donate your retirement plan
One of the worst assets to die with is a retirement plan. An IRA, for example, could be taxed in your estate and then be subject to income tax paid by the person who inherits it. If you leave it to your children, they have to start taking the income out of it within a year, regardless of their age, and that income is going to be taxed. It is a horrible asset to retain in your estate. If you are planning to leave money to charity, consider donating the remainder of your retirement plan as one of the first sources of that bequest, which could be the most tax-efficient strategy for that money.
- Donate your life insurance policy
A lot of people have outdated life insurance policies. They might have taken them out when they were 35 years old and had young children. They took them out because if anything happened, the insurance money would take care of the spouse and get the kids educated. The children are now earning their own keep. The policy has outlived its original purpose. Rather than cash it in or just drop it, why not donate it? Here’s another opportunity to leverage something substantial that might be several hundreds of thousands, or perhaps millions, of dollars.You may or may not continue paying the premium. That’s always an option. If you do, you can write a check to the charity for the premium and get a tax deduction for that amount. Or it could be an old policy that is paid up. But in any case, old insurance policies that no longer serve their purpose are a good place to look for charitable gift opportunities.
Read my book Finding Your Money’s Greater Purpose: How to Make Your Legacy Count for more insight.
Share Your Experience
We’d love to hear how your charitable organization is making a lasting impact on the world. Follow me on Twitter at @PatRenn and use the hashtag #MoneysGreaterPurpose to join the conversation!