Planning Your Legacy

Everyone wants to make the world a better place, but many people struggle with balancing charitable giving with protecting the needs of their family and loved ones. Thankfully, a comprehensive, multifaceted plan can allow you to make sure that those you care about are protected, while still making a lasting positive impact on the world. By including charitable giving strategies in your estate plan, you can leave a legacy that is more than just dollars and cents.

What is Charitable Giving?

Charitable giving seems fairly self-explanatory at first glance. It likely conjures up images of dropping cash into the Salvation Army’s red kettles during the holidays or dropping off your gently used clothes and household items at the local Goodwill. However, when used in a comprehensive estate plan, charitable giving has the potential to be a more versatile and effective tool than many of us imagine. Here are just a few examples of charitable giving strategies used in estate planning:

  • Bequests by Will

    • You can give all or part of your estate, after you pass away, to one or more non-profit organizations that support causes you’re passionate about directly through your will.
  • Charitable Trusts

    • There are multiple types of charitable trusts available to aid you in accomplishing your philanthropic goals, including Charitable Remainder Trusts (CRTs), Charitable Lead Trusts (CLTs), and Pooled Income Funds (PIFs). Trusts are an extremely flexible tool which give you more control over your funds than a simple bequest by will while also having the potential for certain tax-advantages.
  • Donor Advised Funds

    • With a donor advised fund, you are able to donate a wide array of assets and take a more hands-off approach to the investment of those assets. However, you generally still get to call the shots when it comes to the charitable causes your money supports. You can leave a legacy while also taking advantage of favorable tax treatment.

The examples above are only the tip of the iceberg when it comes to the possibilities that charitable giving provides. By way of charitable giving, you can benefit not only the causes and organizations that matter to you, but also yourself and your loved ones. It is important to work with your estate planner to find the best charitable giving strategies for your individual situation so that you can leave a lasting legacy for generations to come.

Leaving a Legacy Through Social Investment

Philanthropy is one of the most effective ways to make a direct impact on the world. By focusing your estate plan on social investment toward the causes you care about, you can lead by example and leave the world a better place than you found it.
By carefully planning and making donations both while living and through a will or trust, you can hugely assist your favorite nonprofit organizations or causes, many of which are underfunded.

An effective charitable giving strategy not only allows you to have a positive impact on the public good, but, through the use of strategies like bunching charitable gifts to maximize deductions, can provide tax benefits as well. Charitable giving does not necessarily mean not leaving anything for your loved ones—a balanced estate plan can be an investment in the world at large while still providing for the people you care about.

Investing in the Future

Bailey Law Firm has experience both in estate planning and in nonprofit law, making us uniquely able to design and implement an effective charitable giving plan. An attorney at Bailey Law Firm can assist you in making a comprehensive charitable giving strategy that maximizes social investment and philanthropy, encompassing both lifetime giving and estate planning, while not ignoring the needs of your loved ones.

There are a number of approaches that we can use to make sure that your charitable donations have their intended effect, such as:

  • Conditional and Restricted Gifts

    • To control a donation for a specific purpose
  • Gifts with Reversion Clauses

    • Can allow for a gift to revert back to the donor’s estate if certain conditions are not met.
  • Socially Responsible Business

    • An increasingly popular philanthropic option is running a socially responsible business. These are for-profit companies that are structured to give regular donations to nonprofit foundations, allowing your business to not only earn revenue but to give back to the community.

There can be a risk of losing tax deductibility and other benefits when using these strategies, so we work with an extensive network of CPAs and other professionals to make sure that we can achieve a balance on these restrictions that does not come with unintended tax consequences.

Estate Planning: The Larger Context

Charitable giving should always be done as part of a comprehensive estate plan done with the help of an estate planning professional. Otherwise, it is possible that your legacy may be thwarted by unintended consequences.

Here are some of the many estate planning tools that may be used in conjunction with charitable giving:

  • Wills
  • Revocable Trusts
  • Irrevocable Trusts
  • Incapacity Planning Documents
  • Asset Protection Trusts
  • Gift Agreements
  • Limited Liability Company, Corporation, Nonprofit, and Limited Partnership Documents

It is crucial to ensure that your estate plan is complete and tailored to your individual circumstances. This may include charitable planning, but should also include documents such as a will and, perhaps, a trust. You want to ensure that every part of your estate is provided for so that your legacy is left intact.

Additionally, many people overlook an extremely important part of planning – incapacity planning. This may be done through documents such as a durable power of attorney, a medical power of attorney, a directive to physicians or living will, and other such documents. Don’t plan a legacy through charitable giving and not protect it with a full, comprehensive plan.

Estate planning is specific to each person, and your plan should account for every part of your estate and for every piece of the legacy you wish to leave. A knowledgeable estate planning attorney can lead you through the planning process and help you craft the perfect plan for you.

Contact Us

The world cannot become a better place without taking action, but before taking action you need to have a plan. At Bailey Law Firm, we have the knowledge and experience to help you make that plan and put it into action. Contact us to discuss your goals for charitable planning so that we can work together towards a brighter future.

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