{Read in 3 minutes} A few months ago, I wrote an article on leaving a legacy by including charities in your estate plan. That article contained a lot of information about how to set up this kind of legacy, but here are some additional things to consider when making gifts to charitable organizations:
Do you want to designate the purpose for which the charity must use the gift?
For example, do you want the gift to be used for improving their building, serving a specific community, or funding a specific project, or are you comfortable with them using it for their general operating expenses? Don’t forget charities need to pay some of the same bills that we all do like electricity, rent, and payroll. Not every dollar a charity collects can go directly to the cause they are trying to serve. Supporting the organization itself is still very important.
Are there any conditions upon the gifts?
Generally in my experience, I do not see people placing conditions on the gift. What is more common is indicating that the donation be made in honor or memory of somebody. An example of a condition might be something like insisting that the money be used for one of the purposes described above, or the deceased be included among the donors listed on or carved into the wall on the side of the institution (for those really big donors for really big charities).
What about other things such as tangible personal property?
Very often I ask people what they wish to do with the belongings that they have in their home. If they are just ordinary, everyday use items that do not have a tremendous amount of value, my client might simply chuckle and say, “Leave it at the curb on trash day.” But the answer is that even if nobody wants it, there are some charitable organizations that take and resell furniture, clothing, etc, for the purpose of raising money for their charity.
A good idea, rather than leaving it directly to the charity, is leaving it directly to someone who can then donate it to charity. Estates generally don’t pay income tax but beneficiaries may have income tax liability. If I leave everything to my sister, and my sister is working, she’s going to pay income taxes on the wages from her job. The ability to donate my used furniture, paintings, jewelry, clothing, etc. may get her a very nice income tax deduction.
If you would like more information about this topic, please contact me.
Thomas Sciacca
www.sciaccalaw.com
[email protected]
(212) 495-0317