There is certainly a place for special trusts and foundations, but they are not a requirement. There are many ways people aren’t aware of to be charitable both in your own family and also in your community.
Giving can be complicated, especially when it moves beyond handing over cash or writing a check. A recent Forbes article provides some practical advice you may not have considered. The article is titled “Five Ways To Be Charitable Even If You Aren't Bill Gates.” And if you’re not Bill Gates, the “five ways” do not require the complexities of family foundations.
Here are the Forbes tips for your charitable consideration:
- Give the gift of education. Have you thought about giving to your own children or grandchildren and in the form of a 529 college savings plan or a direct gift to the college?
- Give your IRS distribution to charity. Since you have to take your required minimum distribution anyhow, send it directly to a charity instead. This option is available for the remainder of 2012, but its future is uncertain.
- Name your charity as your beneficiary on your retirement account. This option is appropriate if you’ve decided that any retirement funds left over should eventually pass to charity instead of loved ones. Be sure to designate your charitable beneficiaries accordingly! Note: The full amount of your retirement account given to charity is income tax free. If left to a non-charity, then the full amount is taxable as ordinary income.
- Donor-advised funds. By giving to a donor advised fund, you can give today, take the charitable deduction in this year’s taxes, but decide which charities to benefit next year or beyond. They are easy to establish too.
- Charitable gift annuity. Are you keen on the idea of receiving a guaranteed lifetime monthly income, especially as an assurance in old age? If you also want to benefit charity in the process, then consider hitting two birds with one stone by opting for a charitable gift annuity.
This is just an overview of the “five ways” featured by Forbes, so be sure to consult with your financial, tax and legal advisors regarding the appropriateness of each for your circumstances.
Reference: Forbes (September 20, 2012) “Five Ways To Be Charitable Even If You Aren't Bill Gates”