When you pass away, the fate of your estate goes on the line. Your estate is everything you own, from your cars to your property to your life insurance and retirement plans. It includes everything from a diamond earring to a couch, as well as all clothing, pets, appliances, businesses, and more. When you die, you want to make sure that all of these things that you worked so hard to obtain go to a place where you would want them. For some people, the estate will naturally go to children and grandchildren. But for others, there may be no one around to inherit the money, or the next-of-kin may be stingy and selfish. For whatever reason, some people want to donate their estate to a charity, rather than hand it over to a relative that they do not know or a selfish child.
Probate donations are only possible through a will or another legal document requesting that the estate be distributed in this way. If a person simple says that he or she wants to donate to a charity, and never documents this desire in a legal will, then the wish cannot be upheld and probate court will divide the will between the closest living relatives. Probate courts are not allowed to take money and donate it to charities without official documentation. People who are passionate about a charitable cause, such as orphans in Africa or whale rescue can parcel their estate into a donation if they choose.
There are a variety of ways to donate your estate. You may want to set up a charitable trust. In this case, the donor transfers the property or assets that will be donated to a charity. Then, those assets can be sold and the proceeds will be received into the charitable trust. From there, the donor receives an income payment one the property, usually for the rest of his or her life. After the donor passes away, the assets in the trust are transferred to the charity. This is a wonderful way to set up the future of your estate, because you can diversify your assets while benefitting from the additional income during your lifetime. Also, a charitable trust makes it convenient to receive a charitable tax deduction on a portion of your property value and avoid capital gains taxes.
Another way to will your real estate is through a retained life estate. If you are planning to will a portion of real estate, such as a vacation home or residence to a charity, then you can give your property title to the charity of your choice. From there, you can receive a charitable tax deduction on the property's value, and be fully aware of where your home is going when you are no longer able to live in it. With a retained life estate, the donor is allowed to remain in the home for life, and avoid many tax expenses. You can also bequest a home to a charity.
This is accomplished by explicitly stating that you will be giving this property or these assets to a specific charity within your legal will. When your property is transferred to the charity, you will receive a tax deduction on the gift. Regardless of your choice, it is best to get a lawyer involved whenever you are talking about estate planning and probate. Attorneys are familiar with the ins and outs of probate, and can figure out how to best divide your estate so that you will receive tax benefits and more. Get started by contacting a probate attorney.