Make Sure Your Charitable Bequest Is Deductible

Are you planning to make a charitable bequest? If so, you should heed some simple guidelines that will help ensure that your gift will qualify as an estate tax deduction. Although the estate tax is fully repealed by 2010, until then you should consider the following information.

In many ways, federal estate tax rules parallel income tax rules, but with this favorable difference: there are no maximums on the dollar amount of the charitable deduction. If you are so inclined, you can leave your entire estate to a qualified charitable organization and your estate won't pay a penny of tax.

A qualified charitable organization (like your favorite charitable organizations) is any religious, charitable, scientific, educational or other organization described in section 501(c)(3) of the Internal Revenue Code.

Be Aware

Here are some circumstances that might affect the deductibility of your bequest.

• Conditional bequest. No deduction is allowed for a charitable bequest that is conditional if there is a real possibility that the condition will not be met. To avoid any difficulty with such a bequest to charitable nonprofits, talk with us to be sure we can carry out your wishes.
• Challenged bequest. If you are concerned that a relative might challenge your charitable bequest, consider providing in your will, in states where allowed, that any beneficiary who does so will not receive a share of your estate.
• Discrimination. A bequest to an institution that practices some form of discrimination can trigger disallowance.

An attorney who specializes in estate planning can guide you to make certain your charitable bequests will be deductible. We can help you and your attorney design a bequest to your favorite charitable organizations.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.



The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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