How to Leave a Legacy Through Charitable Giving
Traditionally, estate plans mainly center around the assets to be left to one’s family and beneficiaries. However, estate planning, in combination with legacy planning, can be used to benefit those who are in need through charitable giving.
Estate Planning v. Legacy Planning
Estate planning and legacy planning are both used to make future arrangements in the event of one’s incapacitation or death. Estate planning is centered on creating documents that protect asset distribution and final wishes. These documents usually include a last will and testament, power of attorney, advance directive, revocable and irrevocable trusts.
Legacy planning, on the other hand, attaches a personal purpose to these estate planning documents and allows one to include their values and morals in their future plan. A legacy plan can be used to ensure the needs of one’s family, such as education, childcare, and pet care, as well as to prioritize charitable giving and business succession.
How to Give
Estate planning can facilitate philanthropy and charitable giving in various forms. There are many non-profit and philanthropic organizations that accept posthumous donations, and using an estate plan to benefit the future of another individual, group or organization can be very fulfilling.
Charitable contributions can be made along with beneficiary designations, or one can donate their entire estate. One may donate assets including, but not limited to, cash, real estate, artwork, and retirement accounts. Individuals can name charities and organizations as beneficiaries in their last will and testament, or use grants, trusts and private foundations as forms of posthumous charitable giving.
Charitable giving is a good option for individuals with no legal heirs. When one dies without an estate plan, their estate is handled and distributed by State courts. For those with no surviving next-of-kin, the estate will become the property of the State. Regardless of whether one has chosen heirs, this outcome is undesirable as it takes away one’s power to establish preferences and final wishes. However, designating charities, churches, and even universities for receipt of assets allows one’s values, wishes, and name to live on while also positively impacting those in need.
Individuals with a surplus of assets may choose to incorporate charitable giving into their estate plans through the creation of a private or family foundation. This is an attractive option for those who would like to make charitable contributions during and after their lifetime through the work of the foundation. The creation of a family foundation can also establish a family legacy that will be passed down from generation to generation.
Incorporating charitable giving into an estate plan is a great opportunity to support a local, regional, or even global cause that reflects personal values. Charitable giving through estate planning allows an individual to associate their memory with an honorable cause and make a difference for future generations. For those who have a history of charitable giving, an estate plan can enable them to continue supporting the issues and causes they are passionate about long after their passing. Charitable giving in estate planning can provide individuals and families peace of mind in knowing that their estate plan will carry on their legacy and empower others.