Since Dolly Parton’s passing, one quote has circulated across the internet: “You can be rich in spirit, kindness, love and all those things that you can’t put a dollar sign on.” While her extraordinary career produced more than 3,000 songs, 49 solo studio albums, and 11 Grammy Awards, it is not simply the music or the accolades that people are holding close or reminiscing over with Dolly Parton’s lengthy career.
Instead, the world is remembering Dolly Parton for the warmth she so freely gave: the families she helped rebuild after natural disasters, the hope she offered through medical research, and the love of reading she placed in the hands of countless children. Her legacy lives not only in the songs she left behind, but in the comfort, opportunity, and kindness she brought to so many lives. While there is no replacing the beacon of joy Dolly Parton was to so many, there is the possibility of carrying on her torch and enriching your spirit, kindness, and love by donating to charity.
The most direct way to support your charity of choice is with a gift of money or property. In addition to aiding a cause you care about, these charitable gifts are tax deduction that may lower your tax bill. To qualify, however, there are several rules that must be followed. First, to qualify for a deduction in a given year, the donation must be given during that tax year—meaning, pledges to give will not count. Second, your charity of choice must be a tax-exempt organization, such as an organization with a 501(c)(3) designation or a church. Next, you must be able to itemize your deductions to receive a charitable deduction. Finally, you must meet certain record keeping requirements. You must keep written records of all cash donations over $250 and must be able to substantiate the value of non-cash gifts with a written acknowledgment from the charity.
While meeting these requirements can help ensure that your charitable gift receives favorable tax treatment, the true value of giving often extends far beyond a deduction on a tax return. A thoughtfully chosen charitable gift can reflect the values that have guided your life and continue supporting the people and causes you care about. For those looking to make an impact that endures beyond your lifetime, charitable giving can become part of the legacy you leave behind.
One available option is to establish a charitable gift in your will or trust, such that upon your passing, a specific amount or percentage of your estate will be distributed to charitable causes. The charitable gift could be a variety of different types of property, such as cash, stocks, or real estate. Additionally, life insurance policies can be left to a charity of your choice with the proper beneficiary designation.
Albeit a slightly more complex strategy for charitable giving, one could also set up a Charitable Remainder Trust (CRT) or a Charitable Lead Trust (CLT). Under a CRT, assets are transferred to a trust for the benefit of a charity. In turn, you receive annual payments from the trust for a term of years and the charity keeps the remaining trust assets at the end of that term. In contrast, a CLT allows a charity to receive the income stream, while any remaining assets flow to listed beneficiaries at the end of the term.
Whether through a simple gift in a will, a beneficiary designation, or a more structured charitable trust, charitable giving allows individuals to use what they have built during their lives to support the people and causes they care about most. These gifts can provide books to children still learning to read, relief to families facing unthinkable loss, resources to communities in need, support for the research that may one day save a life, and so much more.
The information provided is not intended to be legal or tax advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge, New Orleans and Lake Charles, LA. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027
