Should you pass on your estate to a nonprofit organization?

On Behalf of | Apr 12, 2022 | Estate Planning |

Sometimes, people don’t have family members. Other times, they have family members who don’t need assets from them in the future or who they don’t feel deserve an inheritance.

Passing on your estate to the parties you select is up to you. If you don’t want to pass it on to your children or grandchildren, friends or other family members, then you may want to look into charitable giving options instead.

Dying without a will or beneficiary designations

If you die without a will or haven’t selected beneficiaries for your assets, you can expect the state to pass those on based on state law. For example, if you die with a spouse, your spouse will likely obtain the assets in your estate. If you die and have no family or heirs, then the state will benefit from your passing and obtain your assets.

Failing to assign beneficiaries won’t help you prevent conflicts or avoid giving assets to those who you don’t want to give an inheritance.

Look into donating your assets to a charity

If you don’t want to leave behind your assets to your family, you have the option of donating your assets to charity instead. There are multiple ways to do this, but one of the options is for you to use a charitable remainder trust.

A charitable remainder trust may be a good option because it is irrevocable and allows you to obtain an income from the trust until you pass away. At the end of the charitable remainder trust’s term, which may be when you pass away, the assets held within the trust are passed on to the charity.

This kind of trust can be helpful during your lifetime, because you can receive an income tax deduction with this kind of trust arrangement. When you pass away, the trustee is responsible for calculating the payout and paying taxes.

When you don’t have beneficiaries or heirs, or when you want to avoid a conflict with them, you may want to consider this option. Donating to a charity is a kind way to help a charity do its good work in the future.