3 Easy Ways to Leave a Charitable Gift

Easy way to leave charitable gifts

Understanding Charitable Gifts in Estate Planning: Percentage vs. Dollar Amount vs. Residue 

Over 54% of people give to charities while alive and many state that they would like to give once they no longer need their financial resources. When deciding to leave a charitable gift in your estate plan, you have several options to consider. Each approach—whether leaving a percentage of your estate, a specific dollar amount, or a residue gift—has its nuances and implications. Let’s explore the differences to help you make an informed decision. 

1. Percentage Gift 

Leaving a percentage of your estate to a charitable organization involves specifying a portion of your assets or estate value to be donated. This approach is beneficial as it adjusts automatically with changes in your estate’s value over time. Key points to consider: 

·   Flexibility: A percentage gift ensures that your charitable contribution remains proportionate to your overall estate, regardless of fluctuations in asset values. 

·   Impact: If your estate grows, the charitable donation also increases, potentially leaving a more substantial legacy for your chosen cause. 

·   Stability: It provides a stable source of funding for the charity, as the amount received scales with the size of your estate. 


2. Dollar Amount Gift 

Alternatively, you can designate a specific dollar amount to be donated to a charitable organization. This fixed amount ensures clarity in the donation but may not adjust for changes in your estate’s value. Key considerations include: 

·   Certainty: A dollar amount gift provides certainty about the exact donation the charity will receive, irrespective of fluctuations in your estate’s value. 

·   Limitations: If your estate depreciates or experiences financial challenges, the fixed amount may constitute a larger percentage of your estate, potentially affecting other beneficiaries. 

·   Intent: It allows you to express a specific level of support for a cause you’re passionate about. 

3. Residue Gift 

A residue gift involves donating the remainder of your estate after all debts, taxes, and specific bequests have been fulfilled. This approach ensures that your loved ones are provided for first, with the remaining assets benefiting the charitable organization. Key points to note: 

·   Prioritizing Loved Ones: Residue gifts prioritize providing for your heirs and beneficiaries before contributing to charity. 

·   Flexibility: The donation amount to charity varies depending on the size of your estate and the fulfillment of other obligations and bequests. 

·   Legacy: It allows you to leave a charitable legacy while meeting your loved ones’ needs. 

Considerations for Charitable Giving 

When deciding on the type of charitable financial gift in your estate plan, consider factors such as your estate’s size, your philanthropic goals, the stability of your assets, and the impact you wish to make on the charitable organization. 

Consulting with an estate planning attorney and discussing your intentions with the chosen charity can help tailor your charitable giving strategy to align with your values and financial objectives.  Don’t have an estate planning attorney and live in Texas? Lets chat.

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