Charitable giving can be an important part of a comprehensive Colorado estate plan. In addition to establishing a person’s legacy after they’ve passed away, philanthropy may convey tax benefits to the estate or heirs. Regardless of the specific reasons for charitable giving, gifts can usually be readily incorporated into the estate plan by an attorney.
The first step is choosing which causes or organizations will benefit from the philanthropic donations. People who have histories of giving in the past might review their giving habits to make a decision. It can be helpful to think about which community issues are of concern to the person or family. Many estate owners also consider how certain gifts might impact a legacy.
The choice of which assets to give might make a difference when it comes to tax treatment or how the cause receives the gift. Assets that have significantly appreciated since they were purchased might come with high tax bills if they’re given to family members or other individuals. If they’re given to charity, however, the estate might realize tax savings. One problem with this strategy is that many charities are not equipped to accept donations other than cash or liquid assets.
Finally, an individual must determine which instrument or vehicle to use to make the gift. An attorney with experience in estate planning could help at this stage by examining the client’s situation and providing advice regarding the likely tax treatment of different assets. An attorney might create a donor-advised fund or a community foundation on behalf of the client. In some cases, trusts can be used or charitable gifts might be made via the person’s will.