How to Include Charitable Giving in Your Estate Plan

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Key takeaways:

• A gift to charity made through a will or trust—or a testamentary gift—allows an individual or family to combine estate planning and charitable giving.
• The estate tax deduction is unlimited for qualified charitable contributions, so post-death charitable contributions may reduce or even eliminate estate taxes.
• Testamentary gifts can be directed to a public charity, donor-advised fund, private foundation or split-interest charitable trust, such as a charitable remainder trust.
• Some charitable vehicles can play a role in legacy planning, allowing families to extend charitable giving to the next generation and beyond.

Integrating charitable giving into a broader wealth plan

For many individuals and families, charitable giving is an important expression of their core values. Charitable estate planning can help align those philanthropic intentions with broader financial and legacy planning goals.

While some choose to provide support in the form of a direct cash gift, there are a variety of charitable vehicles available that can help donors coordinate philanthropic priorities with their tax, estate and legacy planning objectives.

With U.S. charitable giving topping the $600 billion mark in 2025, philanthropy remains an enduring component of many individuals’ and families’ legacy aspirations. The following considerations may help donors evaluate how the right combination of assets and charitable giving strategies can support broader wealth planning goals.

The tax benefits of testamentary gifts

A testamentary charitable gift is a contribution to charity that is incorporated into an estate plan. It provides for the distribution of assets to a charitable organization or a charitable vehicle after a donor’s death. Bequests, or money left to a person or organization through a will or trust, have long been an important form of charitable giving, with bequest donations increasing 20% or more in three of the last four years, according to Giving USA.

This type of charitable giving may deliver tax benefits. The One Big Beautiful Bill Act, signed into law in 2025, changed certain rules for deducting charitable gifts. The law made permanent the 2017 Tax Cuts and Jobs Act provision that increased the limit on cash contributions to qualified charities to 60% of adjusted gross income (AGI) in a single year; the new law also established a floor on the deductibility of gifts and capped the tax benefits for the highest earners.

The estate tax deduction, on the other hand, is unlimited for qualified charitable contributions. Not only can post-death charitable contributions potentially reduce or even eliminate estate taxes, but some charitable vehicles also permit you to establish a legacy of charitable giving for your family.

Charitable vehicles to choose from

Many of the charitable vehicles available for contributions during your lifetime can also be incorporated into charitable giving estate planning through testamentary gifts. While each option may support different estate planning strategies and charitable goals, they vary in terms of flexibility and administration. Many public charities employ a director of planned giving who can provide guidance on incorporating a testamentary gift into your estate planning documents. These options include:

1. Testamentary gift to public charities: Most assets in the decedent’s gross estate may be directed to a public charity. Any cash or assets contributed to a charity will generate an estate tax charitable deduction, reducing the size of your taxable estate.
2. Testamentary gift to a donor advised fund: Any testamentary gifts to a donor-advised fund (DAF) will provide the same estate tax charitable deduction as a gift to a public charity. Gifts to a DAF let you to establish a legacy of charitable giving by allowing your family members to direct DAF distributions to charities of their choice.
3. Testamentary gift to a private foundation: Gifts to private foundations made during your lifetime are deductible up to 30% of your AGI. There is no such limit on testamentary gifts to private foundations. Such gifts will reduce your taxable estate to the extent of the fair market value of the assets contributed.
4. Testamentary gift to charitable split-interest trusts: The estate tax charitable deduction for charitable lead trusts and charitable remainder trusts  is determined in the same manner that the income tax charitable deduction is calculated. That is, your taxable estate will be reduced by the value of the portion of the gift deemed to pass to charity, as determined when the charitable trust is formed. Testamentary charitable trusts may achieve the same benefits that these trusts accomplish during life. They provide a benefit to charity, mitigate estate taxes and pass assets to your family in a tax-efficient manner. Here is how they work:

• Testamentary charitable lead trust: The income interest is paid to the charity during the term of the trust, and the assets remaining in the trust at termination will be distributed to the family members you designate. The higher the trust’s payout rate to charity, the greater the estate tax deduction.

• Testamentary charitable remainder trust: The unitrust or annuity interest from the trust is paid to family members designated by you. The lower the payout rate to family members, the greater the estate tax deduction for the remainder interest that will pass to the designated charity.

Creating a lasting charitable legacy

Charitable giving strategies such as testamentary gifts can extend the impact of your philanthropy beyond your lifetime and serve as an important component of a broader estate and legacy plan. The most effective approach will depend on your charitable priorities, family considerations, and the legacy you hope to create.

Working with experienced professionals can help you evaluate the charitable vehicles and strategies available to determine which approach best supports your objectives.

To learn more, connect with your Fifth Third Private Bank advisor.