One of the often-overlooked aspects of estate planning tends to be how the individual decides on charitable giving. Many older residents in Indiana are unaware that giving to a charitable organization can reduce taxes on their estate. You aren’t saving more money by refusing to make regular donations to charity.
However, you do need to be careful with your choices. There are a lot of aspects about the process you need to think about before you fully commit to setting up your donations. You need to ask yourself the following questions first:
Who do I provide to?
Giving to charity can be both financially and emotionally rewarding. It is more fulfilling if the organization you select is very important to you personally. Maybe you are more passionate towards giving homeless veterans a roof over their heads or sending food to starving children in Africa. Perhaps you want to give back to a school or church who helped shape you to become the person you are today.
The longevity of the organization is something to think about as well. Donating to a place that has so many supporters means that you don’t really need to deviate from your original plan. On the other hand, some places really need the money to continue doing good and you like to help as many charities as you can.
What do I provide?
There are several ways you can donate to charity. You do not just have to write a check and call it a day. You can give away food, clothing, vehicles, real estate or anything physical that an organization or someone in need would require immediately.
However, you do need to keep in mind that there aren’t many organizations that will accept anything other than cash. Make sure you consult with the charity on what can be given away before you try and give away something that they won’t end up taking.
How much will it affect my taxes?
Given the shifting nature of Indiana’s income and estate taxes, there isn’t a straightforward answer on how much they will go down after a charitable donation. Giving a lot doesn’t mean you will erase these taxes completely.
You need to understand what limitations come with the process. An estate planning attorney can help guide you towards selecting the right amount you need to give away to benefit you and the people you want to aid.