Charitable Deduction from an Estate?

A great answer to a frequently asked question when handling a loved ones estate was recently posted by taxgirl.com.

Here is the situation - Grandma wanted to give $10,000 to the ASPCA.  She told everyone in the family, but didn't put it in her Will. Can the deduction for a charitable contribution still be made?

Like all good questions - the answer is yes and no (isn't the law great?).  Taxgirl summarizes the issues nicely:

Here’s the unhappy rule: if a charitable donation is not specifically authorized in a will or trust, the estate may not properly take a deduction for the donation. <snip>

However, there is some light at the end of the tunnel. Individuals may properly donate items which pass to them from an estate and claim a charitable deduction on their personal return. 

So what to do.  Well, you could take $10,000 from your share of the estate and donate it to charity. Grandma's wishes would be honored, and you would be able to take the deduction on your personal tax return. If there are 4 beneficiaries, each could donate $2500 in her honor.

What if the item to be donated isn't cash, but stuff?  For example, donating all of Grandma's furniture and household items to charity? In that case the best idea is to value the property (have a personal property appraiser come in), distribute the property to the beneficiaries, and then the beneficiaries can take the charitable deduction on their tax returns.  Note that there is not a requirement that the beneficiaries physically take ownership of the property - the property could be transferred to the beneficiaries via an assignment and then all the personal property picked up by the charity at the house.

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Comments (2) Read through and enter the discussion with the form at the end
Wayne Jordan - December 20, 2009 9:39 AM

Good post. A secondary issue regarding Grandma's donation is the issue of Grandma's pets. Many seniors fail to provide for the care of their pets after they die. Often an older animal, they end up getting put down at a shelter.

Deirdre R. Wheatley-Liss, Esq. - December 21, 2009 9:54 AM

A good point about Grandma's pets. Clients need to consider both emergent (you are suddenly in the hospital) and long term care for the furry family members who can't care for themselves. This care will involve both who will take care of the pets (could be family, friends or a business that cares for pets) and the money to provide that care. I blogged on this earlier at http://www.njelderlawestateplanning.com/2009/07/articles/elder-law/pets-more-than-companions-to-seniors/

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