Charitable Giving in Your Estate Plan
Including Charitable Gifts in Your Estate Plan
Charitable giving lets you support nonprofit causes you value long after you pass. You can leave money or property to one or more charities. You decide whether to give a fixed dollar amount, a percentage of your estate, or specific assets like real estate or securities.
Most people include charitable gifts through their will or a trust. A will allows you to name a charity by its legal name and address. You can give a specific gift or a share of the residuary estate. To ensure your gifts are valid, you must execute your will under the rules in Chapter 31 of the North Carolina General Statutes and file it with the clerk of superior court.
Trusts offer more flexibility. For example, you can set up a charitable remainder trust inside a revocable trust. You or loved ones may receive income for life or a term of years. When that period ends, the remainder passes to the named charity. Charitable trusts must meet the requirements in the Uniform Trust Code.
North Carolina Law and Tax Considerations
North Carolina does not impose a state estate tax. However, large estates may owe federal estate tax. Charitable gifts reduce the value of your taxable estate. Your executor can claim a federal estate tax deduction for qualified charitable contributions.
Charitable trusts in North Carolina follow the Uniform Trust Code. Under N.C. Gen. Stat. § 36C-5-501, a trust qualifies as charitable if its purposes benefit the public. If a charity no longer exists or cannot use your gift as intended, the court may apply the cy pres doctrine under N.C. Gen. Stat. § 36C-5-503. This lets the court redirect the gift to a similar charitable purpose.
Protecting Your Gift and Your Intent
To carry out your wishes, describe each charity clearly. Use the charity’s full legal name, address, and federal tax identification number if possible. If you leave a percentage of your estate, state the percentage precisely. Keep your documents up to date. Review your plan after major life events or when a charity changes its name or structure.
Key Takeaways
- Choose the type of gift: specific dollar gift, percentage of estate or assets.
- Use a valid will or trust and follow execution rules in Chapter 31 of the N.C. General Statutes.
- Give clear details: legal name, address and tax ID of each charity.
- Consider a charitable remainder trust under the Uniform Trust Code (N.C. Gen. Stat. § 36C-5-501).
- Understand tax benefits: North Carolina has no estate tax; eligible gifts reduce federal estate tax.
- Plan for contingencies: cy pres doctrine under N.C. Gen. Stat. § 36C-5-503 redirects a failed gift.
- Review your plan periodically and after major changes in your life or the charities’ status.
Ready to Plan Your Charitable Gift?
Including charitable giving in your estate plan ensures your values endure. Pierce Law Group has experienced probate attorneys who guide you through the legal and tax details. Contact us to discuss your goals. Email intake@piercelaw.com or call (919) 341-7055 to schedule a consultation.
