Annapolis, Maryland Charitable Planning Attorney
Serving Families & Individuals in Maryland, District of Columbia, and the Surrounding Areas
Charitable planning in estate planning isn’t just about managing assets; it’s about leaving a lasting impact on the causes you care about most. Whether you’re passionate about supporting education, healthcare, or environmental conservation, integrating charitable giving into your estate plan allows you to support the causes you believe in. Not only that, but your contributions to charitable organizations could provide your estate with sizeable tax benefits.
At The Law Office of Raymond E. Brown, LLC, we’re proud to help our clients incorporate charitable giving into their estate plans. With our in-depth knowledge of Maryland’s estate laws and tax regulations, we can help you develop an estate plan with charitable giving in mind, or incorporate charitable giving into your pre-existing estate plan.
What is Charitable Planning?
In the world of estate planning, charitable planning is the process of incorporating charitable giving into one’s financial legacy. This can be done through setting up charitable trusts, donating assets directly to charitable organizations, establishing charitable gift annuities, or leaving a portion of one’s estate to charitable foundations.
The Importance of Charitable Planning
Charitable planning is an important process because it allows individuals to align their financial goals with their philanthropic goals. By incorporating charitable giving into their estate plans, people can leave a meaningful legacy that extends beyond their lifetime, all while supporting the causes and organizations that they hold dear.
Additionally, incorporating charitable contributions into one’s estate plan can also provide their estate with significant tax advantages. For those with sizable estates, charitable planning can be a strategic tool for minimizing tax liabilities while maximizing the impact of their charitable contributions.
Charitable Giving Vehicles
There are many different ways that someone can incorporate charitable giving into their estate plan. Below are some of the most common charitable giving vehicles used in the estate planning process.
Charitable Trusts (Charitable Remainder Trusts and Charitable Lead Trusts)
Charitable trusts, including charitable remainder trusts (CRTs) and charitable lead trusts (CLTs), are powerful tools in charitable planning. By establishing a charitable remainder trust, individuals can place assets into an irrevocable trust, which they can receive a steady income stream from for a specified period of time. After that time is up, the remaining assets can be donated to designated charities and non-profit organizations.
On the other hand, a charitable lead trust provides one or more charitable organizations with financial support for a specific period of time, after which the assets pass to designated beneficiaries. Both types of trusts offer unique tax benefits and flexibility, making them valuable additions to the charitable planning process.
Donor-advised funds (DAFs) are popular charitable giving vehicles that offer donors flexibility and convenience in managing their charitable contributions. With a donor-advised fund, donors contribute assets to a fund, which is managed by a sponsoring organization like a community foundation or financial institution. Donors can then recommend grants to their favorite charities from the fund over time.
One of the key advantages of DAFs is their simplicity; donors can make a single contribution to the fund and then distribute grants to multiple charities at their discretion. Additionally, DAFs offer potential tax benefits, as contributions to the fund are tax-deductible in the year they are made.
Private foundations offer individuals or families a more hands-on approach to philanthropy by allowing them to establish their own charitable organizations. With a private foundation, donors have greater control over how their charitable funds are invested and distributed. This vehicle provides flexibility in supporting a wide range of charitable activities, including grants to other nonprofit organizations, scholarships, and direct charitable programs.
Gifts of Life Insurance
Gifts of life insurance can be a creative and tax-efficient way to support certain charitable causes. Donors can name a charitable organization as the beneficiary of a life insurance policy, or they can transfer ownership of an existing policy to the charity. This allows donors to make a significant charitable gift to an individual or cause they support without depleting other assets in their estate.
Bequests in Wills
One of the most common and straightforward ways to leave behind a charitable gift is by bequeathing assets to a cause or organization in your will. Donors can include provisions in their wills to leave behind a specific dollar amount, a percentage of their estate, or particular assets to one or more charities of their choice. By incorporating charitable bequests into their estate plans, individuals can ensure that their charitable intentions are carried out according to their wishes.
Tax Implications and Benefits of Charitable Gifting in Maryland
In Maryland, charitable gifts offers several tax implications and benefits for donors. Individuals who make contributions to qualified organizations may be eligible for federal income tax deductions, which can help reduce their taxable income.
Additionally, Maryland allows residents to claim a state income tax deduction for charitable contributions made to qualified organizations. The amount of the deduction varies depending on the type of charitable gift and the donor’s filing status.
Those with long-term appreciated assets, like stocks or real estate, can also make donations to charitable organizations to reduce their capital gains taxes. Lastly, donations made after a person’s death may be subtracted from their taxable estate, reducing the overall burden of taxes on their estate and preserving more of the estate for their heirs.
If given a choice between paying taxes (involuntary philanthropy) or making a charitable gift (voluntary philanthropy), most people would choose to donate to a charitable organization. By strategically donating some of their assets, people can support the causes they care about while minimizing the amount of their estate that will inevitably fall into the hands of the Internal Revenue Service (IRS).
The Process of Charitable Planning with Raymond E. Brown
At The Law Office of Raymond E. Brown, LLC, we provide our clients with highly personalized legal guidance throughout the estate planning and charitable planning process. When you engage our services for charitable planning, we begin by gaining a comprehensive understanding of your financial goals, philanthropic passions, and family dynamics.
Our experienced team will then work closely with you to explore various charitable giving vehicles, such as charitable trusts, donor-advised funds, private foundations, and bequests in wills. We will then tailor a charitable planning strategy that aligns with your objectives and maximizes tax benefits, all while complying with state and federal law.
Throughout the process, we provide clear and informative guidance, ensuring you are well-informed and empowered to make sound decisions. Our overall goal is to ensure you are able to leave a lasting legacy while also providing you with the maximum tax benefits.
Whether you’re looking to maximize your estate tax deduction or you’re looking to minimize your capital gains tax liabilities, Raymond E. Brown and his team are here to provide you with personalized guidance every step of the way.
Why Choose Raymond E. Brown for Charitable Planning
Choosing Raymond E. Brown as your Maryland charitable planning attorney means entrusting your philanthropic aspirations to a legal team with a proven track record in estate planning. With a deep understanding of Maryland’s estate and tax laws, our firm offers unparalleled expertise in navigating the complex landscape of charitable planning.
What sets us apart is our commitment to providing personalized attention and tailored solutions to each client. Raymond E. Brown and his dedicated team take the time to listen to your unique goals and concerns, crafting a comprehensive charitable giving strategy that reflects your values and priorities. We prioritize transparency and communication, ensuring you are well-informed and empowered throughout the planning process.
Call the Experienced Annapolis Estate Planning Attorneys at The Law Office of Raymond E. Brown Today
One of the most important goals of the estate planning process is to ensure that when you pass on, you are able to leave behind a legacy that benefits others. Charitable planning allows you to ensure charitable contributions are made on your behalf after you’re gone, helping others while minimizing your estate’s tax liabilities.
If there are causes or charitable organizations you would like to support while also maximizing your tax benefits, contact The Law Office of Raymond E. Brown today. We can evaluate your financial situation, help you explore your options, and assist you in creating a customized estate plan that meets your individual needs and goals. With our in-depth experience in developing estate plans in Maryland, you can rest assured that your estate plan will be executed correctly and with the highest amount of tax savings possible.
Give us a call at (443) 554-9944 or contact us online to request an initial consultation to discuss your estate planning goals today.