Many people want to give back to their communities or support causes that reflect their values. Including charitable giving in your estate plan is one of the most meaningful ways to do that. Whether you’re passionate about religious organizations, education, health, the arts, or social justice, your legacy can continue to make an impact long after you’re gone.

There’s no single right way to give. The best method depends on your financial situation, the assets you hold and your goals for your family and chosen charities. Thoughtful planning not only helps maximize your impact but can also provide tax advantages and avoid complications for your heirs.

1. Make a Bequest in Your Will

One of the most straightforward ways to give is by naming a charity in your will. This is known as a bequest. You can designate a specific dollar amount, a percentage of your estate, or a particular asset such as property or stocks. Bequests are flexible—you can update them at any time, and they allow you to support causes you care about without affecting your current finances.

2. Name a Charity as a Beneficiary

You can also name a charitable organization as a beneficiary on retirement accounts, life insurance policies, or payable-on-death bank accounts. This approach bypasses probate and allows the charity to receive the funds directly. It’s a simple and effective way to leave a gift without altering your will or trust.

3. Create a Charitable Remainder Trust

A charitable remainder trust (CRT) allows you to provide income to a beneficiary, such as a spouse or child, for a set number of years or for their lifetime. After that period ends, the remaining assets go to a designated charity. CRTs are useful for people who want to support loved ones during their lifetime and still give back to charity in the long run.

4. Set Up a Donor-Advised Fund

A donor-advised fund (DAF) lets you make a charitable contribution now, receive an immediate tax deduction, and recommend grants to charities over time. DAFs are especially appealing for people who want to involve family members in charitable decisions or support multiple causes over several years.

5. Donate Appreciated Assets

Gifting appreciated stock, real estate, or other valuable assets directly to a charity can be more tax-efficient than donating cash. When you donate an asset that has increased in value, you may avoid capital gains taxes while also claiming a charitable deduction based on the full market value.

6. Fund a Scholarship or Endowment

If you want your gift to support a specific purpose, such as education or research, consider funding a scholarship or endowment. These gifts often come with naming opportunities and provide long-term support for institutions or programs that align with your goals.

7. Involve Your Family in Your Giving Plan

Estate planning is also an opportunity to share your values with future generations. Involving your children or grandchildren in charitable giving decisions can help them understand your priorities and foster a spirit of generosity. It also helps reduce misunderstandings and promotes unity around your legacy.

No matter how you choose to give, working with an estate planning attorney is important to ensure that your intentions are clearly documented and legally enforceable. Contact our estate planning firm to put the right planning in place now so that your charitable legacy can live on for generations.

Key Takeaways

  • Bequests offer flexibility and simplicity: Naming a charity in your will allows you to give without affecting your current finances.
  • Beneficiary designations bypass probate: Retirement accounts and life insurance can be directed to charity with a simple form.
  • Trusts provide income and future gifts: Charitable remainder trusts allow you to support both loved ones and charitable causes.
  • Donating appreciated assets saves on taxes: Gifting stock or property may reduce capital gains, while supporting your favorite organizations.
  • Family involvement strengthens your legacy: Including your heirs in charitable decisions fosters shared values and long-term impact.

Reference: Ameriprise Financial “Estate planning and charitable giving: Strategies to make an impact with your estate”