Calvert CountyEstates & ProbateCharitable Giving and Estate Planning for Sunderland Families: Carrying Your Values Forward After You Are Gone

Sunderland sits at the crossroads of northern Calvert County, a community defined in part by its churches, its volunteer fire department, and the institutions that residents have supported for generations. For many Sunderland families, giving has always been part of their lives. Building that commitment into an estate plan is a way to ensure the giving continues after you are gone.

At The Law Offices of Haskell and Dyer, we help Calvert County families structure charitable giving as part of their overall estate plan. The options range from simple bequests in a will to sophisticated charitable trusts. Here is the overview.

Why Include Charitable Giving in an Estate Plan

Charitable giving through an estate plan serves several purposes:

• Carrying forward values. A gift to the church, food bank, or scholarship fund you supported during your life continues that support after you are gone.
• Tax benefits. Charitable gifts reduce the taxable estate, which can significantly lower Maryland and federal estate tax.
• Legacy impact. A named scholarship, a memorial fund, or a building dedication can create a lasting tribute to a family name or a loved one.
• Family values modeling. Including charity in your estate plan sets an example for children and grandchildren about the importance of giving.
• Community continuity. Local institutions depend on planned gifts to remain financially stable across generations.

The Simplest Approach: Charitable Bequests

A charitable bequest is a provision in your will or trust that directs a specific amount, a percentage of the estate, or a specific asset to a charity at your death. Bequests are flexible and can be changed at any time during your life. Common structures include:

• Specific amount bequest: “I give $25,000 to my church.”
• Percentage bequest: “I give 10 percent of my residuary estate to the Calvert County Food Bank.”
• Specific asset bequest: “I give my collection of Chesapeake Bay artwork to the Calvert Marine Museum.”
• Contingent bequest: “If my spouse does not survive me, I give 25 percent of my estate to the American Cancer Society.”

For many Sunderland families, simple charitable bequests in the will or trust accomplish the goal without complexity.

Retirement Accounts as Charitable Gifts

Leaving a retirement account to charity is one of the most tax efficient ways to give. When a charity receives a traditional IRA or 401(k) at death, the charity pays no income tax on the distribution. If the same account were left to a child, the child would pay income tax on the distributions.

A family that wants to leave assets to both charity and children can often reduce total taxes by directing the retirement accounts to the charity and other assets to the children. The charity receives the full value. The children receive assets that carry more favorable tax treatment.

Charitable Remainder Trusts

A charitable remainder trust (CRT) is a more sophisticated tool for families who want to receive income during their lifetime while eventually leaving assets to charity. The donor transfers assets into the trust. The trust provides income to the donor (or other named beneficiaries) for a term of years or for life. At the end of the term, the remaining assets pass to one or more charities.

CRT benefits include:

• Immediate income tax charitable deduction for the present value of the charitable remainder
• Income stream for the donor
• Avoidance of capital gains tax when appreciated assets are contributed
• Estate tax reduction or elimination

CRTs are particularly useful for donors with highly appreciated assets (such as stock that has grown significantly or real estate purchased decades ago at a much lower price).

Charitable Lead Trusts

A charitable lead trust (CLT) is the mirror image of a CRT. The trust pays income to one or more charities for a term of years, with the remaining assets eventually passing to the donor’s family. CLTs are useful for families who want to transfer substantial assets to the next generation while minimizing gift and estate tax.

Donor Advised Funds

A donor advised fund (DAF) is an account held at a sponsoring public charity (such as a community foundation). The donor makes a contribution, receives an immediate tax deduction, and then recommends grants to qualified charities over time. DAFs offer several advantages:

• Simplicity compared to private foundations
• Immediate tax deduction even though grants can be recommended later
• Ability to involve family members in grant recommendations
• Low minimum contributions
• Growth of contributed assets can increase total charitable impact over time

Calvert County residents can work with the Community Foundation of Southern Maryland or national DAF sponsors to establish funds.

Private Foundations

A private foundation is a more formal structure, typically funded with larger contributions. Foundations offer greater control than DAFs but involve more administrative complexity, annual filings, and federal rules about distribution requirements and self dealing. Private foundations make sense for families with substantial wealth and a long term philanthropic vision.

Supporting Religious Institutions

For many Sunderland families, the church is a central part of family life. Planned giving to religious institutions can take many forms:

• Bequests in a will directing a specific amount to the church
• Named endowment funds supporting specific ministries or programs
• Gifts of real estate that the church can use or sell
• Life insurance policies with the church named as beneficiary
• Charitable remainder trusts benefiting the church

Many churches have planned giving staff or committees who can help identify the type of gift that fits both the donor’s intent and the church’s needs.

Local Calvert County Charities

Calvert County has a range of local charitable organizations that often receive planned gifts from residents:

• Local volunteer fire departments and emergency medical services
• The Calvert County Historical Society
• The Calvert Marine Museum
• Local food banks and homeless shelters
• Scholarships administered through local schools
• Environmental and conservation groups protecting the Chesapeake Bay
• Religious institutions and their affiliated ministries

Integrating Charitable Giving with Family Goals

Charitable giving does not have to come at the expense of providing for family. A well structured plan can do both. Common approaches include:

• Leaving the bulk of the estate to family, with specific charitable bequests of fixed amounts or percentages
• Using charitable trusts to provide family income while eventually benefiting charity
• Naming charities as contingent beneficiaries if family members do not survive
• Directing tax efficient assets (retirement accounts) to charity and other assets to family

For the broader framework of how charitable giving fits into your overall plan, see our cornerstone: Calvert County Estates and Probate: A Complete Guide.

This article is for general information only and does not constitute legal advice. Contacting our firm does not create an attorney-client relationship until a formal agreement is signed.