Charity Meets Strategy: Estate Planning That Makes a Difference

Throughout our lives, we may find ourselves inspired by charitable organizations that support our values, our communities, and the causes closest to our hearts. As our connection to these organizations deepens, it’s natural to consider how we can continue supporting them in meaningful ways. Thoughtful estate planning offers an opportunity to extend that impact—allowing you to champion the missions you care about while potentially reducing estate taxes and other tax liabilities along the way. With the federal estate tax exemption projected to drop to $7 million per person in 2026, now is an especially important time to consider strategies for minimizing future tax exposure if one has a taxable estate. Whether you have a taxable estate or not, we have outlined several effective and accessible ways to incorporate charitable giving into your estate plan:  

Donating an IRA

Individuals over age 70½ can make a Qualified Charitable Distribution (QCD) directly from their traditional IRA to a qualified 501(c)(3) charity, up to $108,000 per year. For account holders aged 73 or older, QCDs can be used to satisfy all or part of their required minimum distributions without increasing taxable income. In all cases, QCDs are excluded from taxable income, offering a tax-efficient way to give. Generally, the funds are transferred directly from the IRA to the qualified charity. By giving pre-tax dollars, donors can support their cherished causes more efficiently than with after-tax cash.

Naming a Charity as a Beneficiary

Donors can name a charitable organization directly as a beneficiary of a retirement account, life insurance policy, or payable-on-death bank account. These gifts pass directly to the charity without going through probate and do not incur income or estate taxes. The charity receives the full amount of the gift, while the donor’s estate may be entitled to a charitable deduction.

Setting Up a Charitable Trust

A charitable trust, such as a Charitable Remainder Trust (CRT), allows donors to commit assets for charitable purposes while retaining certain benefits in the donor’s lifetime. Under a CRT, a donor or other beneficiaries, can receive income for a set period of time, and then when a trigger event happens, the remainder goes to the desired charity. Setting up a CRT like this offers a reduction in estate taxes for the passing donor, but preserves the capital utility of CRT assets during their lifetime. 

Donating Land or Real Property

Donating real estate to a charity can be a powerful philanthropic and tax-saving tool. The donor typically receives a charitable contribution income tax deduction based on the property’s fair market value and altogether avoids capital gains tax that would apply if the property were sold. This allows the land’s appreciation be leveraged in estate and tax planning without burdening the donor. And depending on the organization, the charity can benefit enormously from having more space to actualize its potential.

Donor Advised Fund  

A Donor Advised Fund allows individuals to make a charitable contribution to a sponsoring organization, such as a community foundation or financial institution, and receive an immediate income tax deduction for the taxable year the donation was made. From there, the donor can recommend how and when the funds should be distributed to qualified charities over time. While the sponsoring organization of the Donor Advised Fund has final discretion, donor recommendations are generally honored to promote flexibility and continued involvement with the donor. Contributions to a DAF are removed from the donor’s taxable estate, and more importantly, charities benefit from well timed gifts.

Charitable giving is a meaningful expression of your values and can be a strategic part of a well-crafted estate plan. Whether you’re donating land, designating an IRA, or creating a charitable remainder trust, each approach offers the potential to reduce your tax burden while creating lasting support for the causes you care about most. By planning ahead, you not only preserve more of your legacy—you ensure it’s put to work in ways that reflect your passions and principles. Now is a powerful time to take that next step.

If you need assistance in taking the next step, the estate planning team at Moertl, Wilkins & Campbell, S.C. would be more than happy to consult with you regarding your charitable giving goals and estate planning updates to effectuate the same. Call 414-276-4366 today to schedule your free 30-minute initial consultation!