In May of 2015, Hong Kong entrepreneur Yu Pang-lin, who was best known for founding his own real estate industry, passed away at the age of 93. After his passing, the hotelier made history by becoming the first billionaire in China to donate his entire estate, valued at $2 billion, to charity. While not every person is comfortable donating his or her entire fortune to a charity, it is not unusual for someone to leave some of an estate to a cause that has special meaning to him or her. Knowing how to leave bequests to charities through your estate plan will allow you to make sure the organizations that mean the most to you are able to continue helping others thanks in part to your contribution.

Name an Organization as Beneficiary

One of the easiest ways to leave a charity a bequest in your will is to name them as a beneficiary.  The beneficiary designation could be something as simple as specifying that they receive a set monetary amount. Alternatively, you can name a charity as the beneficiary of a retirement account. Not only will this help the charity you choose, it will also decrease any estate taxes that your family may be responsible for since retirement accounts are one of the highest taxed assets of most estates. Choosing to leave your retirement account to a charity alleviates the tax burden your family faces while simultaneously saving the charity you choose from the burden of paying income taxes on the donation you leave them.

Create a Trust

Charitable Remainder Trusts (CRTs) and Charitable Lead Trusts (CLTs) are two types of trusts that allow funds to be shared between both non-charitable and charitable beneficiaries. Setting up a charitable trust allows you to control how donations are made to the charity you choose (periodic or one lump sum) and you have more flexibility regarding how funds are invested.  Both trusts have tax advantages, allow the charity you choose to benefit from any accrued interests, and provide you with a way to leave some of the accumulated funds to a noncharitable source such as a relative, all while generating income through a property that would typically not produce an income.

Establish a Private Charitable Foundation

Establishing your own private charitable foundation is a way to leave funds to support a cause that is important to you while allowing you to control certain aspects of the charity so that it will continue to do good works after you have passed away. Setting up your own foundation allows you to be very specific about the type of charitable work that is done with the funds you are donating and it can also provide you with substantial tax benefits. While starting and registering your own tax-exempt organization is not easy, it is a good idea for anyone who wants to leave a legacy of philanthropy through a charity they created and built up on their own.

Talk to an Expert

Estate planning that includes charities is not simple, but it is rewarding. The best way to ensure that your favorite charities receive the funds that you wish them to have is by consulting a trust and estate lawyer. The team at MMZ Law is prepared to discuss your options for charitable donations and come up with a plan that best suits your needs. Contact us today at 909-256-6702 to schedule a consultation at our Claremont, California office so that we can begin providing you with the legal advice that you need.



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Claremont, CA 91711

MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.

This information is educational information only and not legal advice.