Suggestions for Charitable Giving in Estate Plans

  • Giving a tithe of your Estate to charity – When planning for the future allocation of your Estate, you can use the occasion to reinforce the importance of the biblical concept of a tithe to your family. For example, if a couple with four children had an Estate of $600,000, a tithe of the Estate would provide $60,000 for charity and $540,000 to their children, or approximately $135,000 for each child.
  • “Child Named Charity” – The concept of a “Child Named Charity” actually was presented to Barnabas Foundation by a couple who had lost a child and wanted that child’s share to go to their favorite Christian charities. It has become a popular way for many people to distribute gifts from their Estate.For example, if a couple has four children and wants to include a “Child Named Charity” in their plans, they would divide their Estate five ways: one-fifth to each child and one-fifth to their favorite Christian organizations. A “Child Named Charity” makes a strong statement to family members about your commitment to Christian causes. At the same time, it still provides a substantial portion of your Estate for your children.
  • How much is enough? Determining how much inheritance is enough for your children and grandchildren is a challenging but important process. Christians usually wish to determine an appropriate amount which will help but not harm them and then leave the remainder to Christian charities.For example, if a husband and wife with two children have an Estate valued at $650,000. They decide that a $250,000 inheritance is an appropriate amount for each of their children. This is an inheritance that will allow them to help fund their grandchildren’s college education and help their children plan for their own retirement. The remaining $150,000 will go to their favorite chairties which they have supported their entire adult lives.
  • Zero Tax PlanUnder the current tax law, the Federal government will allow each person to distribute a portion of his or her Estate to their children tax-free. A substantial tax must be paid on anything above that amount. Some Christians decide to give as much to their children as they can without paying taxes up to the limit allowed by law; everything above that amount is donated to their favorite charities.For example, if a husband and wife with three children have an Estate of $9 million and died in 2009, they could each give $3.5 million to their children, or a total of $7 million tax-free. Anything above that amount would be designated for their favorite Christian charities. If you have established a Zero Tax Plan prior to recent tax law changes, you should review that plan in light of current tax law. Depending on the size of a person’s Estate and applicable tax laws, a Zero Tax Plan bequest could be substantial; however, with changes in the law, the charitable bequest could be eliminated altogether.
  • Giving most/all to Christian causesSometimes Christians decide to leave most or all of their Estate to Christian charities. In some cases, the children of people who choose this option have substantially more assets than their parents, or they may have made lifestyle or financial choices that would make it undesirable to give them any more assets. Others who do not have children or other family members they wish to remember with a bequest may leave their entire Estate to the charities of their choice. No matter what type of bequest you choose, we encourage you to notify the charities you have selected to make sure that your gift will be credited and use properly. If a charitable organization knows about your bequest and has made provisions for it, it is more likely that your gift will be handled and acknowledged according to your wishes.

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