Giving: 10 Questions

Jonathan Clements

HAVEN’T GIVEN MUCH thought to estate planning and charitable giving? Here are 10 questions to jumpstart your thinking:

  1. Can you afford to give away money now? You shouldn’t gift large sums to your children or charity unless you’re confident you have enough for your own retirement. There’s no limit on gifts to charity, though your annual tax deduction may be capped. For gifts to family members, you might take advantage of the annual gift-tax exclusion, which is $15,000 in 2018.
  2. Do you have the right beneficiaries listed on your retirement accounts and life insurance? Your individual retirement account and employer’s retirement plan might hold the bulk of your savings, so it’s crucial these accounts pass to the right folks.
  3. At the end of your life, who do you want to make medical decisions on your behalf and how far would you like doctors to go in attempting to prolong your life? You should codify these wishes in a health care power of attorney and living will.
  4. Do you have a will? According to a 2016 Gallup survey, just 44% of U.S. adults have one.
  5. Are you worrying unnecessarily about federal estate taxes? IRS statistics suggest just one out of every 530 deaths triggers federal estate taxes, and the number of families affected will be even lower with the estate tax exclusion climbing to $11.2 million in 2018. Indeed, you should review your estate plan if it was designed to avoid federal estate taxes—but was drawn up before the sharp increase in the federal exclusion since 2001, when it stood at just $675,000.
  6. Does your state impose an estate or inheritance tax? A variety of websites keep a comprehensive list, including and
  7. Should you keep your Roth IRA for your heirs? That pool of tax-free money could make a great bequest. During your lifetime, you might also help your children or other young family members fund a Roth, assuming they have earned income. With decades of compounding ahead of them, even small sums invested today could grow to become significant wealth.
  8. Are the charities you support well-run? Investigate them by heading to sites such as and A crucial question: Of the dollars you donate, what percentage ends up in the hands of the people you’re hoping to help?
  9. Could you save even more on taxes by donating appreciated assets—or, if you’re age 72 or older, giving away part of your annual required minimum distribution?
  10. Have you talked to your adult children about your estate? You should discuss how much they will likely inherit, how you would like the money used, where key documents are located and what your wishes are regarding life-prolonging medical procedures.

Follow Jonathan on Twitter @ClementsMoney and on Facebook. This is the 10th article in a series. Be sure to check out the earlier articles.

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