Leaving a meaningful gift to charity and providing for family members aren’t opposing goals. A charitable gift can be part of a balanced plan, whether it takes the form of a percentage left after family bequests, a retirement account designation, or a structured trust.
Charitable giving in estate planning isn’t limited to families with very large estates, nor is a complex charitable trust required for many charitable gifts. Since 2000, we have helped families in Greensboro and Guilford County understand the practical choices behind their documents, including how a charitable cause can fit alongside the needs of a spouse, children, grandchildren, and other beneficiaries.
Start with the Gift You Want to Leave
Begin with the purpose of the gift, not the tax strategy. Consider which organization matters to you, whether you want it to receive funds during your lifetime or after death, and what you need to provide for family first.
A charitable bequest is a gift made through a will or trust at death. It can take several straightforward forms:
- A specific dollar amount or particular asset given to the organization.
- A percentage of the estate, which rises or falls with the estate’s value.
- A residuary gift, meaning all or a stated share of what remains after debts, expenses, taxes, and other gifts are handled.
A bequest in a will or revocable trust remains changeable during your lifetime. That flexibility matters when family circumstances, financial resources, or charitable priorities evolve.
Account & Policy Beneficiaries
A charity can also be named directly as the beneficiary of a retirement account or life insurance policy. This is done through the account provider’s form rather than by changing a will or trust. Because these instructions generally control who receives the accounts, they need to align with the overall plan.
For many people, charitable giving begins with a modest bequest or an account designation. More elaborate planning is worth considering only when it serves a clear family, financial, or charitable goal.
Understand the North Carolina & Federal Tax Context
For most North Carolina families, a charitable estate gift is primarily a legacy decision, not a state estate tax strategy. North Carolina doesn’t impose a state estate tax or inheritance tax.
Federal estate tax is a separate issue. For 2026, the federal estate and gift tax basic exclusion amount is $15 million per individual. Estates above the applicable federal threshold require closer tax analysis. Property left to a qualifying charity is generally deductible from the gross estate when calculating federal estate tax.
These tax rules shouldn’t be blended. A charitable deduction on a lifetime federal income tax return, a federal estate tax charitable deduction, and the treatment of appreciated property each involve distinct requirements. The tax treatment of a charitable gift depends on the donor’s circumstances, the asset, the receiving organization, and the governing documents.
That distinction is one reason a charitable gift shouldn’t be added as an isolated change. A simple instruction in one document can affect inheritances, account distributions, and planning goals elsewhere.
Consider Retirement Accounts for Charitable Gifts
IRA assets deserve separate review because they can carry income tax consequences for individual beneficiaries. Naming a qualifying charity to receive all or part of a traditional IRA at death differs from making a gift through a will or during your lifetime.
A qualified charitable distribution is a direct transfer from a traditional IRA to a qualifying charity during the account owner’s lifetime. Donors age 70½ or older can use qualified charitable distributions, and the 2026 limit is $111,000 per person.
The transfer must go directly from the IRA trustee to the charity. If the account owner withdraws the money first and then writes a check, the gift isn’t a qualified charitable distribution. A qualified charitable distribution and naming a charity to receive an IRA at death can both support charitable goals, but they accomplish different things and should be evaluated separately.
Know When a Charitable Trust May Fit
Charitable trusts aren’t the default answer, but they can fit a family with substantial assets, a desire to create a continuing income stream, or a plan to divide benefits between charity and family over time. These arrangements are irrevocable, so funding the trust generally can’t be reversed.
Charitable Remainder Trust
A charitable remainder trust pays income to the donor or another named beneficiary for life or for a term of up to 20 years. When that period ends, the remaining trust assets go to one or more qualified charities.
Federal rules require annual payments of at least 5 percent and no more than 50 percent of trust assets. The charity’s projected remainder interest must also equal at least 10 percent of the amount transferred to the trust. Those requirements and the ongoing administration make individualized legal and tax review essential before creating this type of trust.
Charitable Lead Trust
A charitable lead trust pays income to charity for a stated term, then passes the remaining principal to family members or other noncharitable beneficiaries.
This structure can be relevant when someone wants a charity to benefit first while preserving a future transfer to family. It requires careful review of the trust terms, projected asset performance, tax treatment, and the needs of those who will receive the remaining assets.
Coordinate the Gift with the Rest of Your Estate Plan
A will or trust may contain one set of instructions, while assets such as retirement accounts and life insurance may pass under separate designations. Those instructions must work together.
We consider charitable causes within a broader estate plan that may include:
- Wills and trusts.
- Powers of attorney.
- Medicaid planning.
- Probate support.
- Trust administration.
- Guardianship-related matters.
Each part should support the plan for incapacity, family needs, and administration after death without creating unintended conflicts.
Before naming a charity or changing an existing gift, gather the information needed for a productive estate plan review:
- Your current will, trust, and any amendments.
- Current account and policy forms for retirement accounts and life insurance.
- The legal name of each intended charity and an alternate recipient if the organization no longer exists or can’t accept the gift.
- A list of intended family beneficiaries and the assets or shares you want each person to receive.
- Information about the asset you plan to give, including whether it’s an IRA, insurance policy, cash asset, real estate interest, or other property.
A clear designation helps the people administering the estate carry out your intent. It also allows you to decide whether the gift should be fixed, percentage-based, contingent on other gifts, or limited to a particular account.
Thoughtful charitable planning starts with the people and causes you want your estate plan to reflect, then tests each document and designation against that goal. For guidance on charitable causes, charitable remainder trusts, and your other estate planning needs, contact Law Offices of Cheryl David through our office or call (336) 717-0375.