Giving Thanks and Charitable Giving

Thanksgiving 2020 is going to be a much smaller, quieter affair for most of us. Times are tough for many people this year. For those who are fortunate to have the extra resources, Thanksgiving week may be the perfect time to take a few minutes to consider making charitable gifts to support a cause you care about or people in need. Making a charitable gift of even a modest sum can be a tremendous benefit to the organization at the receiving end of the gift. In addition, for 2020, the federal CARES Act allows taxpayers to take a $300 deduction for charitable giving on their tax returns for this year, even if they do not itemize deductions.

Charitable giving may take the form of a one-time gift, a regular donation, or an end-of life gift that is included in your estate plan. An end-of-life charitable gift can fit into an estate plan in a number of ways:

• A specific bequest to a charity in a Will identifies a specific amount of money that will be distributed to the charitable organization following your death during the probate of your estate.

• A residuary bequest to a charitable organization provides that a certain percentage of your probate assets be distributed to the charity, after any specific bequests and all costs of estate administration are paid.

• A gift of tangible personal property, such as a vehicle or artwork, can benefit the many charitable organizations willing to accept that type of gift.

• A nonprobate account beneficiary designation can be directed to a charitable organization, so that a bank account, retirement account, investment account, or other account will be distributed in whole or in part to the named organization.

End-of-life charitable gifts can provide tax benefits as well. For people who have an estate large enough to be subject to Washington’s estate tax, charitable gifts on death via bequest or beneficiary designation will reduce the size of their Washington taxable estate. Washington’s estate tax is imposed on the value of an individual’s estate above an exclusion amount that is set at $2.193 million for 2020. Making a charitable gift on death will reduce the size of a Washingtonian’s taxable estate by the amount of the gift.

There are as many reasons to consider including charitable giving in your estate plan as there are worthy organizations who can put your money to work for a good cause. As this challenging year lurches toward the finish line, take a few minutes to give thanks for what you have, to think about those who are less fortunate, and to consider whether you have the means to help. It is also a good time to consider including charitable giving in your estate plan. If you have questions about ways to include charitable giving in your estate plan, we’re happy to help!