Estate planning lawyers across the country have been waiting impatiently to see how the government’s choices are going to affect their clients over the long-term. One of the biggest concerns is whether or not the “death tax” is going to be levied against estates worth $1 million or more. (In 2012, the number was $5 million.)
As a result of all this uncertainty, nonprofit organizations are finding that charitable contributions have dropped off considerably. There are multiple reasons for this. Of course, we’re still experiencing a difficult economy, with many people unwilling or unable to part with extra money this year. Many estate planning lawyers are also seeing that there are clients who are choosing not to make their annual contributions because it’s just not as financially advantageous to have those “write offs” as it used to be.
That’s not to say that people are just being greedy, rather that they’re planning for the long-term. They may be planning to hold onto their contributions this year only to make bigger ones next year when the results are more favorable to them. It is definitely worthwhile to take some time to meet with your estate planning lawyer in Newport Beach to look at the situation from various angles and decide what is the best approach for you.
That said, it’s good to remember that charitable contributions are just that—charitable. Of course it is great to receive a tax benefit from sharing what you have; but that’s obviously not the only reason to do so. It makes sense to bring your morals and beliefs into play when determining how and when to make your contributions.
Here are a few suggestions:
1. If you decide not to make your typical donation this year, consider giving of your time through volunteer efforts instead. Host a food drive, a clothing drive, or even a company fundraiser.
2. Do some research when making your decisions. It’s fairly easy to find out how a nonprofit organization is doing financially, and if you find that one you usually support is struggling due to these tax considerations, you might decide it’s worth it to contribute this year anyway.
3. See if you can take part in a matching program (or start one yourself). By offering to match donations up to a certain dollar amount and allowing the organization to advertise that, you can double the impact of your contribution.
4. Consider whether or not you can view a contribution as an investment. By setting up a matching program, putting together a food drive, or volunteering your time, you can demonstrate leadership to others and as an added bonus, you can include such activities on your resume or curriculum vitae.
Of course, the decision of whether or not any of these actions are a good fit is up to you. Your Newport Beach attorney can help you with your choices or can help you develop a long-term giving strategy or legacy plan for your estate.