Bequests and Outright Gifts are some of the most common means of charitable giving.
Let’s examine some of the Advantages of giving directly to charity:
- Inexpensive and Easy to Accomplish – Let’s face it, it doesn’t get much cheaper or easier than simply opening up a checkbook and writing a large check to your favorite charity. No ongoing administration of charitable trusts or foundations, no hiring of independent trustees to manage trust assets, no filing of annual compliance reports, etc.
- Timeliness of the Gift – One compelling benefit, especially at year-end tax planning time, is the speed with which one can make a direct charitable gift. Charitable trusts or private foundations can take from days to weeks to establish, but a check can be written (or stock transferred), in a comparatively short period of time.
- Donor Retains All Lifetime Benefits of the Asset – Unlike charitable trusts or foundations, which may restrict the Donor’s use of his or her assets during their life, a bequest allows the Donor to retain unlimited control during their life, and receiving full tax deduction benefits upon their death. Certain IRS rules and regulations govern this area, so we recommend seeking qualified legal representation when making a bequest.
- Charity Retains Maximum Flexibility in Use of Donated Funds – In the case of a major gift or bequest, the recipient charity will be the primary decision-maker on how such funds are spent. While certain gifts may be designated by the Donor for certain uses (i.e. endowing a chair at a local university), in the majority of cases the charity, and not the Donor, will determine how the funds are spent. Donors wishing to retain stronger control over how their money is spent should consider other charitable giving strategies.