Estate Planning in Retirement: Giving to Charity

Many people choose to give to charity as a way to give back to their community. If you are overfunded you may decide to give to charity while you are still alive as well as part of your estate after you pass. On this episode of Retirement Answer Man, we’ll continue the estate planning series to discuss different ways that you can give charitably now and as part of your estate. Stick around to hear the Q&A session with my esteemed guest Peter Lazaroff. What is a charity? 

U.S. citizens are known for being extremely charitable people. Although many people help others as individuals, a charity is an organization that uses money and human capital to make a greater impact in the world. Different charities have different motivations and missions. When choosing a charity to give to it is important to look at its mission but also to make sure that the organization is a good steward of the money it receives. What motivates you to give? 

Each of us has a different motivation to give to charity. Maybe your reasons are personal, or perhaps your life was affected by a certain event. Some people practice charitable giving as a way to model good citizenship to their family. Others are overfunded and use charitable donations to help ease their tax burden. For whatever reason you choose to give to charity it is important to make sure to find organizations that match your values. Why do you choose to give to charity? How you can give to charity in life 

There are several ways to give to charity now while you are still alive.

If you are over 72 you may find that your RMD is more than you need. You can solve this problem and reduce your tax burden by making a qualified charitable distribution. You can give to one organization or spread out your contribution among several charities. 

You can donate appreciated assets and avoid capital gains. If you donate all or a portion of appreciated assets directly to a qualified charity you can avoid capital gains. This could help you rebalance your portfolio or reposition your assets. 

Use a donor-advised fund (DAF) like your own charity. With a DAF you can donate cash or assets. It’s like a simple version of a private foundation. You can choose one or many different charities to give to. Listen in to hear how you can involve the family in your charitable giving. 

Use a trust in tandem with your charitable giving. Charitable remainder trusts or charitable lead trusts are a bit more complicated and require the help of an attorney. How to give in an estate after you pass  

There are basically 2 ways that you can give to charity in your estate once you pass. You can either make a bequest in your will or name the charity as a beneficiary of an asset. The most simple and direct way is by making a bequest in your will. If you chose to name a charity as a beneficiary in an IRA asset then the charity would pay no income tax on that asset. How would you prefer to give to charity? OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WHAT DOES THAT MEAN? 

• [3:08] What is charity?

PRACTICAL PLANNING SEGMENT 

• [7:04] What motivates you to give to charity?
• [9:30] How to give to charity while you are still alive
• [22:44] How you can give your estate

Q&A WITH PETER LAZAROFF 

• [26:44] Peter describes when decided to create his own estate documents
• [30:38] Will a Roth conversion send your assets over the income limit?
• [33:33] How to become a financial planner later in life
• [44:30] How to navigate stock risk with your company

TODAY’S SMART SPRINT SEGMENT 

• [52:52] Examine your charitable giving to look for planning opportunities

Resources Mentioned In This Episode
XY Planning Network
PeterLazaroff.com
Rock Retirement Club
Roger’s YouTube Channel - Roger That
BOOK - Rock Retirement  by Roger Whitney
Work with Roger
Roger’s Retirement Learning Center