Bob Hope once quipped, “If you haven’t any charity in your heart, you have the worst kind of heart trouble.” Surely he was on to something. The best sorts of people are admired not for their earnings but for their giving—whether of their time, their talent, or their treasure.
Many of us in the LGBT community give generously by supporting causes we believe in. We donate towards AIDS research, we lobby for equality, we volunteer at animal shelters, and we support the arts. This level of engagement is not unknown outside our community, but as lesbian, gay, bisexual, and transgender citizens, we often embrace important causes with a special kind of passion.
With a little advance planning, these charitable impulses can continue to help others after we are gone. Consider the causes you currently support. By including a specific bequest in your Will, you can ensure that your financial support for them outlives you. Even if you bequeath a modest amount—say, 10 times your annual donation—you can effectively endow your regular gift for a period of years beyond your death.
“If you haven’t any charity in your heart, you have the worst kind of heart trouble.” —Bob Hope
How much should you leave to charity? Those of us who are fortunate enough to have a spouse, partner, or children will of course want to provide for them first. After all, charity begins at home. But even a token bequest to a worthy cause can be a gratifying addition to your estate plan. In the words of Oscar Wilde, “The smallest act of kindness is worth more than the grandest intention.”
If you have more substantial assets, you might consider setting up a charitable remainder trust. This type of trust enables you to give generously to your favorite charity while enjoying significant tax savings yourself.
Here’s how it works: Once you establish and fund the trust, the named charity acts as the trustee, managing the trust assets. You receive regular income payments from the trust for a set number of years or for the rest of your life, depending on the terms of the trust instrument. These payments can be a percentage of the trust’s interest income or a fixed amount. Then upon your death, the remaining trust assets are distributed to the charity to support its mission.
Under a charitable remainder trust, you can take an income tax deduction for the value of your gift to the trust. This deduction is spread out over five years, and the value of your projected income from the trust is subtracted from it. For example, if you set up a $500,000.00 charitable remainder trust and your projected trust income is $125,000.00, the value of your gift for tax purposes will be $375,000.00. Upon your death, the remaining trust assets are excluded from your estate, which may result in an additional tax savings.
Whether you want to establish a charitable remainder trust or simply make a small bequest to an organization you have long supported, calling an estates and trusts lawyer is the first step. With professional guidance, you can ensure that your estate plan reflects your personal sense of charity.
Perhaps the nineteenth-century clergyman Henry Ward Beecher put it best: “Every charitable act is a stepping stone toward heaven.”