New Jersey residents may want to consider planned giving as part of their estate plan. Planned giving refers to arranging a donation to charity while a person is still alive. Planned giving can offer a number of benefits to donors, charities and beneficiaries.
Planned giving can help a person save on taxes. Some options include a charitable remainder trust, a charitable gift annuity and an IRA charitable rollover. These tax advantages may also affect the tax burden on beneficiaries. By doing this planning early and putting it in writing, both the donor and beneficiaries will know what to expect. The burden of guessing what a person may have wanted is removed for loved ones. Charitable trusts may also provide income for the donor during that person’s lifetime.
This also provides an opportunity for a person to strengthen community ties and create a philanthropic legacy. Planned giving establishes philanthropy as a family tradition. Furthermore, a person can talk to loved ones and to the chosen charity about what would be most beneficial. For example, some people might prefer property while others might want a more liquid asset.
Even if a person does not intend to set up planned giving, talking about estate planning with family members can be important. Elements of this estate plan could include a trust, a living will and powers of attorney. A trust can be useful for managing money for beneficiaries. The creator of the trust can specify rules for distributing assets, such as tying it to a certain age or educational achievement, or a trustee can be appointed to make decisions about when to make distributions. A living will outlines a person’s desires for end-of-life care and powers of attorney can appoint people to make financial and health care decisions if the principal is incapacitated.