Every estate plan answers a fundamental question: what happens to everything you’ve built? For many Michigan families, the answer includes more than just providing for loved ones. It includes giving back — to the communities, causes, and institutions that shaped their lives.

But in 2026, charitable giving in estate planning carries new urgency. The One Big Beautiful Bill Act — signed into law on July 4, 2025 — permanently raised the federal estate tax exemption to $15 million per individual, which is welcome news.

At the same time, the Act introduced new limitations on charitable deductions that change how donors receive tax benefits for their generosity. A new 0.5% adjusted gross income (AGI) floor means smaller gifts may no longer reduce your tax bill. And for high-income taxpayers in the top bracket, the value of charitable deductions is now capped at 35 cents per dollar instead of 37.

The result: charitable estate planning isn’t just about generosity in 2026 — it’s about strategy. Whether you’re a Metro Detroit donor looking to maximize deductions, a Wayne County family considering a charitable trust, or a Michigan retiree exploring qualified charitable distributions from your IRA, understanding how the new rules affect your giving is the first step toward a plan that reflects both your financial goals and your deepest values.

What Changed for Charitable Giving Under the One Big Beautiful Bill Act

The One Big Beautiful Bill Act made sweeping changes to the federal tax code, and several provisions directly affect charitable estate planning for Southeast Michigan families. Here’s what you need to know heading into 2026:

• The federal estate and gift tax exemption is now $15 million per individual — or $30 million for married couples using portability. This exemption is permanent, with annual inflation adjustments beginning in 2027. Unlike the temporary increase under the 2017 Tax Cuts and Jobs Act, there is no sunset provision. Michigan does not impose a separate state estate tax, so the federal exemption is the only threshold Michigan families need to consider.

• A new 0.5% AGI floor applies to charitable deductions for itemizers. Starting in 2026, only charitable contributions exceeding 0.5% of your adjusted gross income are deductible. For a Southeast Michigan family with $200,000 in AGI, the first $1,000 of giving is not deductible. For a family earning $500,000, that floor rises to $2,500. This is a meaningful change from prior law, where all qualifying contributions were deductible without a minimum floor.

• The 60% of AGI cap for cash charitable contributions is now permanent. Donors who itemize can still deduct cash gifts to public charities up to 60% of AGI — a provision that was previously set to revert to 50%.

• High-income donors face a 35% cap on deduction value. Taxpayers in the top 37% federal income tax bracket will now receive only 35 cents of tax benefit per dollar of itemized deductions, including charitable contributions. A $10,000 donation that yielded a $3,700 tax savings in 2025 now generates only $3,500 in 2026.

• A new non-itemizer charitable deduction is available. Taxpayers who take the standard deduction — which rises to $16,100 for single filers and $32,200 for married couples filing jointly in 2026 — can now deduct up to $1,000 ($2,000 for joint filers) in cash gifts to qualifying public charities. This deduction does not apply to gifts made through donor-advised funds or to private foundations.

“Many Michigan residents don’t realize that while the estate tax exemption went up, the rules for deducting charitable gifts got more restrictive in 2026. Strategic planning — including bunching, donor-advised funds, and qualified charitable distributions — is now essential to maximize the tax benefit of giving.”

Charitable Trusts: The Workhorse of Tax-Smart Giving

Charitable trusts remain among the most sophisticated estate planning tools available, and their value increases in an environment where deduction rules have tightened. For Michigan families with appreciated assets, real estate, or business interests, charitable trusts offer benefits that go well beyond the annual deduction.

Charitable Remainder Trusts (CRTs)

A charitable remainder trust allows you to transfer assets into an irrevocable trust, receive an income stream for a set period or for life, and then pass the remaining assets to a qualified charity. Under IRC Section 664, the key benefits include:

• An immediate income tax deduction based on the present value of the charitable remainder
• No capital gains tax on appreciated assets transferred into the trust
• A steady income stream during your lifetime or a term of years
• Reduction of your taxable estate

For a Southeast Michigan family holding appreciated stock or investment real estate, a CRT can convert a concentrated, low-basis asset into diversified income — without triggering the capital gains bill that a direct sale would create. And because the charitable deduction from a CRT is based on the present value of the remainder interest, it often clears the new 0.5% AGI floor with room to spare.

New for 2026: Individuals age 70½ or older can also make a one-time QCD of up to $55,000 from a traditional IRA directly into a charitable remainder trust or charitable gift annuity — combining the benefits of both strategies.

Charitable Lead Trusts (CLTs)

A charitable lead trust works in reverse. The charity receives income from the trust for a set period, and then the remaining assets pass to your heirs — often at significantly reduced gift and estate tax costs. CLTs are particularly effective for families who want to transfer wealth to the next generation while supporting causes they care about during the interim.

“In our experience serving Michigan families, charitable trusts are underutilized not because families lack generosity, but because they don’t realize these tools exist — or that they can simultaneously support a cause and protect family wealth.”

Charitable Bequests: The Simplest Path to Giving

Not every charitable gift requires a complex trust structure. A charitable bequest — a gift written directly into your will or revocable living trust — is the simplest and most common form of charitable estate planning.

You can designate a specific dollar amount, a percentage of your estate, or the residual balance after other distributions. Bequests to qualified charities are fully deductible from your federal taxable estate under IRC Section 2055, meaning every dollar given to charity is a dollar that isn’t subject to the 40% federal estate tax — even under the new $15 million exemption.

For Michigan families working with Boroja, Bernier & Associates on comprehensive trust-based estate plans — which typically range from $2,500 to $5,500 — incorporating charitable bequests adds minimal complexity but can deliver outsized tax and legacy benefits. An especially tax-efficient approach: name a charity as a beneficiary of your IRA or retirement account, where distributions would otherwise be subject to income tax in the hands of non-spouse beneficiaries under the SECURE Act’s 10-year rule.

Donor-Advised Funds: More Important Than Ever in 2026

A donor-advised fund (DAF) functions like a charitable savings account. You make an irrevocable contribution to the fund, receive an immediate income tax deduction, and then recommend grants to charities over time. The fund is managed by a sponsoring organization — and Southeast Michigan has excellent options.

The Community Foundation for Southeast Michigan, one of the largest community foundations in the country, offers donor-advised funds tailored to families in Wayne County, Oakland County, Macomb County, and the broader Metro Detroit region. National sponsors like Fidelity Charitable, Schwab Charitable, and Vanguard Charitable also serve Michigan donors.

Why DAFs Are Even More Valuable After the One Big Beautiful Bill Act

The new 0.5% AGI floor makes DAFs a critical planning tool for 2026 and beyond. Here’s why:

Bunching strategy. Instead of making moderate charitable gifts every year — where a portion falls below the AGI floor and generates no deduction — families can “bunch” two or three years’ worth of giving into a single DAF contribution.

A family with $200,000 in AGI that normally gives $3,000 per year would lose the first $1,000 to the floor annually. By contributing $9,000 into a DAF in one year, only $1,000 is lost to the floor instead of $3,000 over three years — and the family can still recommend grants to their favorite charities in each of those years.

Michigan’s flat 4.25% state income tax compounds the benefit, because federal charitable deductions that reduce your AGI also reduce your Michigan tax liability.

Important limitation: The new non-itemizer charitable deduction ($1,000 single / $2,000 joint) does not apply to contributions made to donor-advised funds. Families taking the standard deduction who want to claim this new deduction must make gifts directly to qualifying public charities.

Qualified Charitable Distributions: The Most Tax-Efficient Tool in 2026

For Michigan residents age 70½ or older with traditional IRAs, qualified charitable distributions (QCDs) have always been powerful — and the One Big Beautiful Bill Act just made them even more valuable.

Under IRC Section 408(d)(8), a QCD allows you to transfer up to $111,000 per individual (or $222,000 for married couples) directly from your IRA to a qualified charity in 2026. This limit is indexed for inflation.

The critical advantage in 2026: QCDs bypass every new limitation the One Big Beautiful Bill Act imposed on charitable deductions:

• QCDs are excluded from taxable income entirely — they are not an itemized deduction
• They are not subject to the 0.5% AGI floor
• They are not affected by the 35% cap on deduction value for high-income taxpayers
• They satisfy your required minimum distribution (RMD) without increasing your adjusted gross income
• A lower AGI can also reduce Medicare Part B and Part D premiums (IRMAA)

For a Metro Detroit retiree taking a $75,000 RMD, directing that distribution as a QCD rather than taking it as income and donating separately could save $7,000 or more in combined federal and Michigan income taxes — while also avoiding the AGI floor and preserving the standard deduction.

“Under the 2026 tax rules, qualified charitable distributions are the single most tax-efficient charitable giving strategy available to Michigan retirees. A QCD reduces taxable income, satisfies your RMD, bypasses the new charitable deduction limitations, and supports the causes you care about — all in one transaction.”

QCDs cannot be made to donor-advised funds or private foundations. They must go directly to a qualifying 501(c)(3) public charity.

Building a Charitable Legacy in Southeast Michigan

Charitable estate planning isn’t just about tax strategy. For many Wayne County and Metro Detroit families, it’s about embedding values into a financial plan that outlasts a single generation.

Consider the possibilities:

• endowing a scholarship at a local university,
• creating a permanent fund at the Community Foundation for Southeast Michigan, or
• establishing a family giving tradition through a donor-advised fund that your children and grandchildren help direct.

These aren’t abstract concepts — they’re practical structures that Michigan estate planning attorneys build into comprehensive plans every day.

The families who get this right share a common trait: they plan proactively. They work with attorneys who understand both the evolving tax code and the personal dimensions of giving, and they put structures in place while options are plentiful — not during a crisis or at the last minute.

At Boroja, Bernier & Associates, we help Michigan families build estate plans that reflect the full picture — asset protection, tax efficiency, family provision, and charitable legacy. That holistic approach is what separates a plan that merely distributes assets from one that truly protects a family’s values and vision.

Frequently Asked Questions About Charitable Estate Planning in Michigan

What is a qualified charitable distribution (QCD), and who qualifies in 2026?

A QCD is a direct transfer from a traditional IRA to a qualified charity, available to individuals age 70½ or older. The 2026 annual limit is $111,000 per person ($222,000 for married couples filing jointly). QCDs count toward your required minimum distribution, are excluded from taxable income, and — critically — bypass the new 0.5% AGI floor and 35% deduction cap imposed by the One Big Beautiful Bill Act.

How does the new 0.5% AGI floor affect charitable giving in Michigan?

Starting in 2026, itemizers can only deduct charitable contributions that exceed 0.5% of their adjusted gross income. For a Michigan taxpayer with $300,000 in AGI, the first $1,500 of charitable giving is not deductible. This makes strategies like bunching contributions into a donor-advised fund, making larger gifts less frequently, and using QCDs more important than in prior years. Because Michigan’s income tax is based on federal AGI, reducing your AGI through strategic giving also reduces your state tax.

What is the difference between a charitable remainder trust and a charitable lead trust?

A charitable remainder trust pays income to you (or a beneficiary) first, with the remainder going to charity — and generates an immediate income tax deduction. A charitable lead trust pays income to charity first, with the remainder passing to your heirs at reduced gift and estate tax costs. CRTs are more common for individuals seeking income and tax deductions; CLTs are favored by families focused on tax-efficient wealth transfer to the next generation.

How much does it cost to include charitable giving in a Michigan estate plan?

Incorporating charitable bequests into a comprehensive trust-based estate plan typically adds minimal cost. At Boroja, Bernier & Associates, comprehensive trust-based estate plans range from $2,500 to $5,500 and can include charitable provisions alongside powers of attorney, trusts, wills, and advance directives. More complex structures like standalone charitable remainder trusts or lead trusts may involve additional costs depending on the assets and goals involved.

Did the One Big Beautiful Bill Act change the federal estate tax exemption?

Yes. The One Big Beautiful Bill Act permanently set the federal estate and gift tax exemption at $15 million per individual ($30 million for married couples) effective January 1, 2026, indexed for inflation. This replaced the temporary increase under the Tax Cuts and Jobs Act that was scheduled to sunset. Michigan does not have a state estate tax, so the federal exemption is the only estate tax threshold Michigan families need to consider.

Can non-itemizers still get a tax benefit from charitable giving in 2026?

Yes. The One Big Beautiful Bill Act created a new above-the-line deduction for taxpayers who take the standard deduction: up to $1,000 for single filers or $2,000 for married couples filing jointly. This deduction applies only to cash gifts made directly to qualifying 501(c)(3) public charities — it does not apply to contributions to donor-advised funds or private foundations.

What Southeast Michigan charities can I include in my estate plan?

Southeast Michigan offers numerous qualified charitable organizations, including the Community Foundation for Southeast Michigan, the United Way for Southeastern Michigan, Michigan Medicine and university foundations, and hundreds of local nonprofits serving Wayne County, Oakland County, and Macomb County. Any 501(c)(3) organization qualifies for estate tax deductions and most charitable giving vehicles. For QCDs specifically, the charity must be a public charity — donor-advised funds and private foundations are not eligible.

Take the Next Step: Build a Plan That Reflects Your Full Legacy

The 2026 tax landscape has changed. The One Big Beautiful Bill Act raised the estate tax exemption but added new complexity to charitable deductions. For Michigan families who want their giving to work as hard as the rest of their estate plan, strategic guidance isn’t optional — it’s essential.

At Boroja, Bernier & Associates, we help Michigan families throughout the state design estate plans that go beyond asset distribution — plans that incorporate charitable trusts, donor-advised funds, bequests, and tax-efficient giving strategies tailored to each family’s goals and the current tax rules. With offices in Shelby Township, Troy, Ann Arbor, and Lansing, our estate planning attorneys serve clients statewide.

To schedule a consultation with the Michigan estate planning attorneys at Boroja, Bernier & Associates, call our law offices at (586) 991-7611. The rules have changed — make sure your plan reflects them.