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Charitable giving planning, P.1

Estate planning can involve a number of strategies depending on the donor's specific situation and goals. One of those goals, for many individuals, is charitable giving.

Charitable giving is something many people wish to do as they begin to form their estate plan. People have various reasons for pursuing gifting strategies. But whatever the reasons, it is important for donors to consider all the options available to them so that they may maximize the efficiency of their approach.

One important thing to do when planning charitable giving is to look at the various types of giving plans available. It is also good to be aware that tax laws change, and that it is wise to consult experts to assist in forming the giving plan. Also, remember that the best type of plan will depend if the donor is retired or still working.

In planning a charitable gift, the donor should speak with the charity about their plan, find out the exact legal name of the charity, obtain their tax identification number, and ensure that their gift is usable. These are all important preliminary measures.

Talking to a CPA, an attorney and a financial adviser is also important, as it will assist the donor in coming up with a plan right for their situation and in taking advantage of opportunities to minimize tax costs.

And of course, it is important for the donor to have a clear sense of why they are making a charitable donation in the first place. Chances are that donors will agree with the organization's mission. Maybe they simply want to give back to the community in some way. Whatever the reason for giving, it is important for the donor to keep it clear in their mind, and remember that they have the right to know how their gift is being used.

According to various experts, the early 50s are best age to start planning charitable giving, but it is wise to plan even further in advance to ensure that the resources are in place to make the donation.

In our next post, we'll look briefly at a handful of specific options available to donors and the advantages of these approaches.

Source: Southeast Missourian, "Estate Planning Guide: An explanation of charitable giving plans," Robyn Gautschy, 7 Mar 2011.

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