Whether you want to support a local Baldwin County nonprofit or a national organization, thoughtful charitable planning can help you give wisely, reduce taxes, and leave your loved ones with a powerful example of generosity.
At the Law Office of Brenton C. McWilliams, we’re honored to help families across Baldwin County build estate plans that reflect their values.
Why Include Charitable Giving in Your Estate Plan?
Incorporating philanthropy into your estate plan offers both emotional and practical benefits:
- Support causes that matter to you
- Leave a lasting legacy
- Inspire future generations
- Potentially reduce estate and income taxes
Whether you’re deeply involved in a local church, a Baldwin County scholarship fund, or an Alabama conservation group, giving through your estate plan ensures your impact continues beyond your lifetime.
1. Bequests in Your Will or Trust
One of the simplest and most flexible ways to give is by including a bequest in your will or revocable living trust. You can leave a specific dollar amount, a percentage of your estate, or a particular asset (such as real estate or stock) to a qualified charity.
Advantages:
- Easy to update if your goals change
- Does not affect your finances during your lifetime
- Reduces the taxable value of your estate
Example:
“I give 10% of my estate to [Charity Name], a 501(c)(3) organization, to support its mission in Baldwin County, Alabama.”
2. Donating Retirement Assets (IRA or 401(k))
Did you know that your retirement accounts can be some of the most tax-efficient gifts you leave to charity? Assets in traditional IRAs and 401(k)s are typically taxed when withdrawn by your heirs. However, charities can receive the full value tax-free.
How it works:
- Name the charity as a beneficiary of your IRA or 401(k)
- Your estate avoids income tax on those assets
- Your other assets can be directed to family members with fewer tax consequences
Ideal for:
Charitably inclined individuals who want to minimize income tax burdens on their heirs.
3. Qualified Charitable Distributions (QCDs)
If you’re over age 70½, you can donate directly from your IRA to a qualified charity using a Qualified Charitable Distribution. This strategy allows you to give up to $100,000 per year, directly reducing your taxable income.
Key benefits:
- Counts toward your Required Minimum Distribution (RMD)
- Reduces your adjusted gross income (AGI)
- Doesn’t require itemizing deductions
Note:
QCDs must be made directly from the IRA to the charity. This strategy works best while you are living and want to give generously without affecting your estate’s liquidity.
4. Charitable Remainder Trusts (CRTs)
A Charitable Remainder Trust is an irrevocable trust that provides income to you (or another beneficiary) for life or a set number of years. After that, the remainder goes to a designated charity.
How it benefits you:
- You receive annual income from the trust
- You may qualify for a partial charitable deduction
- You avoid capital gains taxes on appreciated assets placed into the trust
When to consider this:
If you have highly appreciated assets, such as real estate or stocks, and want to convert them into income while still benefiting a cause you love.
5. Charitable Lead Trusts (CLTs)
The opposite of a CRT, a Charitable Lead Trust pays income to a charity for a fixed period. After that term, the remaining assets go to your heirs—often with significant tax savings.
Ideal for:
- High-net-worth families looking to reduce estate or gift taxes
- Individuals who want to support charity now and family later
Local Impact:
Consider naming a Baldwin County organization, such as a local church, animal rescue, or community foundation, as the income beneficiary. You’ll make an immediate difference while preserving wealth for future generations.
6. Donor-Advised Funds (DAFs)
Donor-Advised Funds are like charitable savings accounts. You make a tax-deductible contribution to the fund and recommend grants to charities over time. Though the DAF is not part of your estate plan per se, it’s a valuable tool during your lifetime and can be continued through successor advisors or your estate.
Why people choose DAFs:
- Immediate tax deduction
- Flexibility in choosing recipients over time
- Can involve family in giving decisions
Planning tip:
You can name your DAF as a beneficiary in your will or trust, making it a hybrid giving strategy that bridges lifetime and legacy philanthropy.
7. Gifting Appreciated Assets
Donating appreciated stock or property can be more tax-efficient than giving cash. You avoid paying capital gains tax, and you may receive a charitable deduction for the fair market value.
Examples of assets:
- Stocks or mutual funds
- Real estate
- Collectibles (if accepted by the charity)
Important:
Always consult a qualified estate planning attorney to ensure gifts are properly structured and align with your overall estate plan.
Local Giving Matters
At the Law Office of Brenton C. McWilliams, we love helping clients give back to the communities that shaped them. Whether it’s a scholarship at an Alabama university, a grant to a Baldwin County food pantry, or a contribution to your family church, your charitable giving can strengthen the places and people you care about most.
And you don’t have to be wealthy to make a difference. Even modest gifts, when strategically planned, can leave a legacy of hope and generosity.
Create a Plan That Reflects Your Values
Charitable giving is deeply personal. That’s why we take the time to understand your priorities, family dynamics, and financial goals. Together, we’ll create a customized estate plan that allows you to give meaningfully while protecting your loved ones.
Whether you’re new to estate planning or revisiting your goals later in life, we’re here to help.
Let’s build a legacy that goes beyond wealth—one that reflects your heart.
Schedule a confidential consultation with the Law Office of Brenton C. McWilliams today. Proudly serving clients throughout Baldwin County and the surrounding areas.
