Estate planning involves strategies, which is where the bestowal of charitable gifts fits into the picture. Not only is gift-giving to qualified charitable organizations helping the recipients, but the goodwill is also beneficial to the donor. For instance, you can deduct the donation from your income taxes and avoid probate, capital gains, and estate taxes.

Recognize Qualified Charities and Their Limits
Qualified charitable organizations are non-profit, United States-based entities that are not affiliated with political interests. Other qualified charities include fraternal, volunteer fire, veterans', and civil defense organizations. Cash donations, unlike other tangible assets, can be unlimited.

3 Types of Gifts and Their Benefits

1. Charitable Remainder Trust - Sell lucrative investments and reinvest the proceeds, which can eventually gain income, while avoiding capital gains taxes.

2. Charitable Lead Trust - The income is donated to a charity of your choice while the principal is saved and presented to your beneficiaries upon your death with limited or no estate taxes assessed on the estate.

3. Outright Gift - Claim the gift, which is subject to a limit, on your income taxes and the remainder of that gift for up to five years.

This information is presented to educate the reader and does not constitute professional tax and legal advice.

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