Estate tax savings have long been one of the benefits of giving to charity. In recent years, however, this has been less of a factor for many donors. The federal estate tax exemption was approximately doubled for 2018 through 2025, so fewer donors were worrying about estate taxes. The One Big Beautiful Bill Act has now made the high exemption “permanent,” meaning that it has no expiration date. It also slightly increases the 2026 exemption to $15 million ($30 million for married couples), with annual inflation indexing returning in 2027.

For nonprofits, the high “permanent” exemption raises an important question: Will fewer donors include charitable gifts in their estate planning? Here are three reasons why charitable giving will continue to be valuable in estate planning:

1. Charitable bequests still offer tax savings for estates that exceed the exemption.

Donors with estates exceeding the $15 million exemption remain subject to a 40% federal estate tax on the excess. Amounts left to qualified charities are fully deductible for federal estate tax purposes, reducing the taxable estate and the overall estate tax burden.

2. Charitable donations can reduce income taxes during life and complement other wealth-preservation strategies.

Even with a large exemption, many high-net-worth families continue to use trusts, philanthropic vehicles and lifetime gifts as part of a broader strategy to reduce income taxes and preserve wealth. For example, charitable remainder trusts and donor-advised funds funded during life can provide donors with valuable income tax deductions. Donations of long-term appreciated securities can also provide capital gains tax savings. Qualified charitable distributions (QCDs) from traditional IRAs save the income tax that otherwise would be due on the distributed funds, count toward IRA required minimum distributions, and can even preserve eligibility for tax breaks that phase out based on adjusted gross income or modified adjusted gross income.

3. Charitable gifts allow donors to shape their legacy.

Estate planning isn’t solely about tax minimization — it’s also about aligning wealth with personal values. Many donors want the distribution of their assets to at least partially fund causes they care about, whether supporting community programs, advancing education, or strengthening faith-based or humanitarian work. Planned gifts allow donors to make a significant impact without affecting their current financial security.

Nonprofit leaders and development teams can help donors understand that charitable giving remains an important part of estate planning, regardless of wealth level. Emphasizing legacy, personal values and the organization’s long-term mission can resonate strongly with supporters who want their philanthropy to reflect what matters most to them.

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