A comprehensive estate plan does much more than simply decide who will receive which assets when you die. For most people, an estate plan also includes incapacity planning, retirement planning and even charitable giving. If you wish to include charitable giving into your estate plan, you should be sure to do your homework first.
Choosing a charity can be a daunting task considering that there are over one million public charitable organizations alone throughout the U.S. according to the National Center for Charitable Statistics. Add to that thousands of private foundations and foreign based charities and the list become prohibitive. There are, however, things you can do to narrow down the list.
One option is to focus on local charities. Search your community for worthy causes that you can support. If you wish to expand your search, try using websites like charitywatch.org. After selecting a few possible candidates, you should check to be sure that they are recognized by the Internal Revenue Service so that you will receive the tax benefits that are offered for charitable donations. You can check for IRS recognition using the Exempt Organization Select Check.
Next, you may want to look up the charity on Charity Navigator. Here, you can find out what percentage of the money donated is spent on administrative costs. In addition, you can get an overall picture of how financially healthy the charity is before you decide to donate money or assets.
Your last step will be to decide how to best incorporate your chosen charity into your estate plan. You may choose a direct gift or something more structured and ongoing such as a charitable trust. Be sure to discuss your options with your estate planning attorney.
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