How Animal Lovers Can Use RMDs and Other Financial Strategies to Support Their Pets and Animal Charities

As an animal lover, you want to ensure your pets and the causes you care about are provided for. Using financial strategies like Required Minimum Distributions (RMDs), Donor-Advised Funds (DAFs), and pet trusts, you can support both your pets and animal-related charities.

Using RMDs for Charitable Contributions

If you’re over 73, you’re required to take RMDs from your retirement accounts. One effective strategy is using a Qualified Charitable Distribution (QCD), which allows you to direct up to $105,000 of your RMD to a charity of your choice in 2024. This option is especially useful if you want to support animal organizations, as it not only helps meet your RMD requirements but can also reduce your taxable income. For example, you could direct part of your RMD to a local animal shelter, creating an immediate impact while avoiding a tax burden.

Donor-Advised Funds for Flexibility

A Donor-Advised Fund (DAF) allows you to contribute to charitable causes over time. You can make contributions to a DAF in the form of cash, appreciated securities, or other assets, and recommend grants to animal charities when you choose. This offers flexibility while providing an immediate tax deduction, and it allows you to continue supporting the causes you care about for years. For instance, you could donate to a DAF today and later direct grants to your favorite animal rescue organization as their needs evolve.

Pet Trusts for Your Pets’ Care

A pet trust is a great solution if you're worried about your pets’ care after you're no longer able to provide for them. With a pet trust, you can set aside funds for your pets’ ongoing care and designate a trustee to manage the money according to your instructions. This ensures that your pets will continue to receive the care they need, even after you’re gone.

Legacy Planning for Animal Lovers

To leave a lasting gift that supports both your pets and animal charities, you can include a charitable bequest in your will, name an animal charity as a beneficiary of a life insurance policy, or create a trust to provide for your pets’ care. Your estate plan can reflect your passion for animal welfare while ensuring both your pets and causes are well cared for after your lifetime.

With thoughtful planning, you can create a financial strategy that supports both your beloved pets and the animal charities you care about. Whether you utilize RMDs, DAFs, or pet trusts, working with a financial advisor can help you develop a legacy that reflects your love for animals.