The Pentera Blog
Doubling the Estate-Tax Exemption Has Not Reduced Bequests, Says Giving USA™
Good news for planned giving! The recent doubling of the estate-tax exemption has to date not reduced the percentage of estates that include a charitable bequest, according to Giving USA 2019.
The annual report on philanthropy that was released earlier this year covered the year 2018 - the first year affected by the Tax Cuts and Jobs Act that doubled the estate-tax exemption for individuals from $5.49 million in 2017 to $11.18 million in 2018. While that resulted in fewer estates having to pay estate taxes, it did not affect the number including a charitable bequest (which reduces estate taxes).
"About 5% of estates leave a charitable bequest each year," the report states. "Despite recent estate-tax law changes, there appears to have been no measured change in the percentage of estates that have left a bequest in recent years, according to Giving USA™'s estimates for giving by estates that file tax returns, as well as estates that do not."
The report did say that the new tax law is expected to eventually have an impact on fundraising by bequest - though there is some disagreement on what that effect might be.
"Analysis suggests that fewer estates being subject to the estate tax could result in a decline of the amount of charitable bequests by an estimated $7 billion per year," the report states. "It's also possible that high-net-worth individuals will maintain current charitable bequests, or even increase them, due to a lower tax burden."
Bequests were up very slightly in current dollars in 2018 - to $39.7 billion - but down about 2% when adjusted for inflation.
The Giving USA 2019 report can be ordered here.
