Work & Money

Estate Planning and Charitable Giving

Year end is fast approaching, and besides the pandemic, there are two other things on your minds – the holidays and charitable giving. 

The best advice from financial advisors is that charitable giving should be part of your estate plan to get the most benefits. Here are a few tips to maximize your giving and to prevent some of the common mistakes.

  • Don’t give away too much while you are still living. “Keep some in reserve so that if you live longer than expected, you don’t impoverish yourself,” says Sharon Duncan, CFP and Financial Advisor with Selah Financial Services in Houston, Texas.
  • Consider the tax benefits. Giving to charity in your lifetime and after you’re gone may help reduce federal and estate taxes significantly, according to Fidelity. “With proper planning you can shift money that would have normally gone to IRS to people and causes that your care most about,” said Duncan. “You don’t want to make the government one of your charities.”

But don’t let tax benefits drive your decisions. “The biggest mistake people make is that that it will affect taxes enough that they can live tax free life. It doesn’t work that way. The actual giving should be the main reason.”

  • Don’t wait until you’re gone to make contributions. “Charitable giving can start while you are alive and you can see the fruits of your giving,” says Luis Strohmeier at Octavia Wealth Advisors in Los Angeles, California. “You can see the actual impact.”
  • Donate directly from your retirement account. Use a Qualified Charity Distribution (QCD). The money comes directly from your Individual Retirement Account without you ever having to pay taxes on the withdrawal. It will also count as a Required Minimum Distribution (RMD). The IRS requires that you start making withdrawals from tax-deferred retirement accounts when you turn 72.
  • Make sure your heirs understand what you are trying to accomplish. “There is a disconnect between next generation and entity the first generation is giving to,” said Strohmeier. “The children are like ‘I don’t go to that church. None of my children went to that school and we don’t even live in that community.’ Now they are in charge of that trust. It becomes a cumbersome situation. Talk it over with second and third generations. Say ‘This is what I want, this is why I want it.’”
  • Get professional help. “Discuss it with a team of professionals, not one,” Strohmeier said. “Interview the right attorney who can draft documents in such a way that it speaks to your mind, heart and soul. “You don’t want to go to an attorney who dabbles. You need a good accountant who can navigate through the process. You want a financial advisor who can help you plan properly. You don’t want to be left with nothing. Make sure your goals are taken care of and you still have a satisfactory quality of life in retirement.”


Rodney A. Brooks writes about retirement and personal finance issues. His column currently runs in U.S. News & World Report. He has written columns on retirement for The Washington Post and USA TODAY. He has also written for National Geographic, Next Avenue and Black Enterprise magazine. He retired as Deputy Managing Editor/Personal Finance and retirement columnist for USA TODAY in 2015. 

Your use of any financial advice is at your sole discretion and risk. and Older Adults Technology Services makes no claim or promise of any result or success. 

Planned giving allows you to create your own lasting legacy. By including SeniorPlanet/OATS in your will or retirement plan, you will become an active participant in changing the future of aging. If you have questions about including OATS in your will or other types of planned giving, please contact us at 718-360-1707 or by email at


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One response to “Estate Planning and Charitable Giving

  1. Most helpful article, thanks so much! One question on this great suggestion:

    “The money comes directly from your Individual Retirement Account without you ever having to pay taxes on the withdrawal.”

    Is this something to be arranged with my IRA account bank? Or with IRS? Forgive my ignorance, but I do wish to minimize taxes on RMDs.

    Thanks again for your article. :)

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