Charitable Giving as Part of Your Estate Plan
Most people think of charitable giving as writing a check. But within an estate plan, charitable giving can accomplish much more — reducing estate and income taxes, providing you with an income stream during your lifetime, supporting institutions that matter to your family, and creating a legacy that outlasts you.
I help clients think through how charitable giving fits into their broader estate plan — whether that means a simple bequest in a will, a trust structure that pays income back to the family, or a named scholarship fund at a local institution.
You don't need to be wealthy to give strategically. Even modest estates can incorporate meaningful charitable gifts that make a difference — and that reflect a lifetime of values.
Ways to Incorporate Charitable Giving
Testamentary Bequest
Leave a specific dollar amount, percentage of your estate, or a particular asset to a charity through your will or trust. Simple and effective for most donors.
Charitable Remainder Trust
Transfer an asset to a trust, receive income for life or a set term, take a tax deduction now, and direct the remainder to charity when the trust ends.
Charitable Lead Trust
The charity receives income from the trust for a set period; what remains passes to your heirs at a reduced tax cost.
Family Legacy Fund
Establish a named scholarship, endowment, or fund at a university, hospital, or community organization — creating a lasting family legacy.
The Tax Benefits of Charitable Giving
Charitable giving within an estate plan carries meaningful tax advantages:
- Estate tax deduction — charitable bequests are fully deductible for federal estate tax purposes, reducing your taxable estate dollar-for-dollar
- Income tax deduction — gifts of appreciated assets can generate a charitable deduction while avoiding capital gains tax on the appreciation
- Current deduction for future gifts — certain trust structures allow you to donate property now and receive a tax deduction today, even though the charity receives the asset later
For most Utah families, estate taxes are not a concern — the federal exemption is high enough that only very large estates face them. But for those with significant assets, charitable giving is one of the most powerful tools available for reducing estate tax liability.
Supporting Your Family as a Charitable Act
One of the most meaningful legacies you can leave is an investment in your family's future. Estate planning tools can be used to create:
- Education funds for children and grandchildren
- Incentive trusts that reward work, education, or achievement
- Named scholarship funds at local universities benefiting future generations of students
Utah Valley University alone has hundreds of scholarships funded by donors who included gifts in their estate plans. The impact of even a modest endowment — carefully structured — can benefit students for decades. One of Paul's ancestors set up a scholarship at UVU which is now benefiting the fifth generation.
Frequently Asked Questions
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Yes. You can leave a specific dollar amount, a percentage of your estate, or a particular asset — such as real estate or a brokerage account — to a charity of your choice through your will or trust. These gifts take effect at your death and are straightforward to include in your estate plan.
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A charitable remainder trust (CRT) allows you to transfer an asset to the trust, receive an income stream from it for the rest of your life or a set term, take an immediate charitable income tax deduction, and have the remainder pass to your chosen charity when the trust ends. It is a way to support a cause you care about while also receiving income and a tax benefit during your lifetime.
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Charitable bequests in your estate plan are fully deductible for federal estate tax purposes, reducing the taxable value of your estate dollar-for-dollar. For larger estates, strategic charitable giving can significantly reduce estate tax liability while directing assets to causes you value.
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Yes, and it is often more tax-efficient than giving cash. When you donate appreciated property directly to a charity, you generally avoid paying capital gains tax on the appreciation and receive a charitable deduction for the full fair market value of the asset. This makes gifting appreciated stock or real estate particularly powerful.