- What Is Estate Planning?
- Benefits of Estate Planning
- What to Include in Your Estate Plan
- Charitable Bequests - What They Are & Why Consider Making One
- Options for Nonprofit Gifting to Consider
- Types of Charitable Contributions Structures (Living Trusts, Donor Advised Funds)
- Tax Benefits of Estate Charitable Gifting
- Beneficiary Organizations In Estate Planning Documents
In your life, you have worked hard to build a legacy that you can be proud of and someday pass on to your heirs. But what if you could also leave an enduring legacy of generosity that would benefit others beyond your family?
Charitable gifting is an important part of estate planning. It allows you to support causes that are important to you while still providing for the financial security of your loved ones. Let’s take a look at why charitable gifting is so important, how it works, and the various ways you can use it in your estate planning.
Why Consider Charitable Gifting?
Charitable gifting can be a great way to make sure that your legacy of giving continues long after you’re gone. It allows you to continue supporting nonprofits or causes that were important to you in life without impacting your heirs’ financial security. In addition, there are tax benefits associated with charitable gifting – you may be able to reduce the amount of taxes owed by your estate or even receive additional deductions for gifts given during life.
How Does Charitable Gifting Work?
In order to make sure that charitable gifting is properly included in your estate plan, it’s crucial to understand how it works. You must ensure all necessary documents are created (e.g., wills and trusts). Additionally, any gifts must be made according to IRS guidelines for them to qualify as deductible donations when filing taxes. If you don’t have experience preparing these types of documents, working with an attorney may help ensure everything is done correctly and efficiently.
Knowing Where to Start
One of the most common challenges people face regarding estate planning and charitable gifting is not knowing where to start. Without a clear plan or understanding of estate law, making informed decisions about how to structure an estate plan that reflects your wishes can be difficult.
What Documents Are Needed
Additionally, many people don't know what documents are needed for estate planning or how to make charitable bequests in a way that ensures they're used effectively. Fortunately, with the right knowledge and resources,estate planning and charitable gifting doesn't have to be overwhelming – and this guide will provide you with all the information you need.
Provide a Safe and Loving Home
As a supporter of NCHS’s mission to provide a safe and loving care for every child, you understand the importance of sharing an umbrella to support each other through life’s struggles and storms. We hope as you build your estate plan, you will remember the vital work of NCHS and consider making a gift of any size to continue to keep open the umbrella of support.
What Is Estate Planning?
Estate planning is the process in which individuals formalize and document their wishes for their final days and afterward. This often includes, but is not limited to, determining who will make medical or financial decisions on your behalf if you are not able to make them yourself, how you want your assets handled and what happens to any dependents after you pass, and what you want to be done with your remains (organ/tissue donation, donated to science, burial, or cremation, etc.)
Estate planning is a crucial step in providing financial stability for yourself and your family. Without an estate plan, the decision regarding who will be responsible for your estate and assets may fall upon the courts or other parties that do not have your best interests at heart.
Estate planning allows you to designate beneficiaries, assign legal guardians, establish trusts, and make other arrangements to ensure that your wealth and property are properly distributed according to your wishes. It also helps provide peace of mind knowing that your family will be taken care of if something were to happen to you. Estate planning is an essential part of ensuring your legacy lives on after you're gone.
Benefits of Estate Planning
Estate planning & charitable gifting are important steps to take in providing a secure future for your family. While this process can be complex, by planning ahead, you can ensure that your legacy will be taken care of according to your wishes.
Estate planning & charitable gifting provide tangible and intangible benefits for both yourself and your loved ones.
A few of these benefits are:
- Ensuring that your wishes will be carried out according to your instructions after you pass away.
- You'll have peace of mind knowing that your loved ones will be taken care of.
- Charitable gifting provides tax benefits and helps to support a cause that is important to you.
- Increases compliance from healthcare providers as well as family members about what they should do when it comes time to make decisions on your behalf.
- Increases the probability that if you end up with a life-limiting illness, you can pass away in your preferred place, such as your home or a care facility.
- Estate planning allows you to think through and make complex decisions ahead of time when you can think more clearly.
- Improves the bereavement experience of your family and loved ones by relieving the burden of decision-making and reducing anxiety, stress, and depression after you are gone.
- Creates fewer opportunities for argument and indecision about your care or arrangements among your surviving relatives.
- Offers protection to your dependents as decisions of who will serve as guardians and manage finances will already be determined.
What to Include in Your Estate Plan
Building an estate plan can be intimidating, but we’ve broken it down into nine simple steps.
Catalog Your Assets
Create a catalog of all of your physical, financial, and digital assets, and start thinking about who you’d like to receive them after you pass.
Physical assets mostly include items that have a title, like cars, boats, RVs, homes, and property. They can also be sentimental items like jewelry, your heirloom tomato plants, or your favorite fishing pole. Think about the things that matter most to you and who you want to care for them after you are gone.
Financial assets are money in checking or savings accounts, businesses, mutual or retirement funds, stocks and bonds, Health Savings Accounts (HSA), or life insurance policies.
Digital assets are a little less straightforward and are often overlooked. This is truly a digital age, and determining who will have access to the family videos saved on your phone or computer are important assets to consider, especially for your grieving loved ones. Other digital formats to consider are PDFs, videos, presentations, audio files, images, spreadsheets, graphics, and design files.
Consider adding co-owners to your assets. By adding your favorite nephew to the title of the truck you taught him to drive in, you can help to ensure it passes to the correct person. Make sure to list them as a “joint tenant” with the “right to survivorship” on the title. However, this concept has a couple of downsides to keep in mind. The first is that if you ever want to sell the item or connect it with a loan, the co-owner needs to agree. And second is that if the asset’s value is over a certain amount, they could potentially receive a federal gift tax when it transfers to them.
A smaller number of material things in possession makes estate planning easier. Some people will start to gift or hand over possessions to others as they are creating their estate plans.
Determine What You Need
It’s time to look at your life from a high level and determine what you need. Do you need a lawyer to help you legally clear up confusion over some assets? Are you comfortable using an online package, or do you need an attorney to help you?
An online will works fine for 95% of the population. However, if your estate is worth over $1 million, you may want to consider a living trust instead of a will. Living trusts transfer your money and assets to a trust while you are still alive that you control as the trustee. This can be a great way to avoid probate court and minimize estate taxes.
Create a Will
When building your estate plan, many people believe that their will IS their plan, but it’s actually just a piece of it, though it is an essential part. The first step is determining what type of will is best for you. For most people, a simple will is sufficient. Then you’ll need to actually complete your will.
We’ve created this worksheet to help you compile all the information you will need in one place. Then you can find a legitimate online form written by a lawyer or take it with you when you meet with your lawyer. Once your will is complete, you will need to print it out, sign and date it in front of two witnesses. It’s not legally required to have your will notarized in most states. However, it is recommended that you do so as an added protection after you are gone.
List Who You Want to Include In Your Estate Plan
There are certain roles to consider for the people that you want to be part of your legacy: beneficiaries, executors, guardians for dependent children or pets, trusted advisors, and medical and financial power of attorneys.
Beneficiaries - The people or causes you want to receive your assets when you die. It’s important to choose beneficiaries now; otherwise, a probate court will decide what to do with your estate, and they may not distribute it as you wish.
Tip: Create a backup plan and pick contingent beneficiaries in case something happens to the individuals you chose as primary beneficiaries.
Executors - This is the person or people who you appoint to ensure that your wishes in this plan are carried out. A good idea is to think of the person in your life who has the knowledge and time to distribute every part of your estate according to your will. Once you have someone in mind, ask them if they would be okay to be your executor before adding them to your will.
Guardians - If you have dependents, this is easily one of the most important decisions you will make during this process. A guardian is someone who would have legal custody of your child or children and their property when you are no longer able to care for them. If you don’t name a guardian in your will, the courts will decide for you.
Guardians for Pets - Your furry companion has brought so much joy to your life. Make sure that they are properly cared for by designating someone to look after them when you die. Otherwise, they may end up in a shelter.
Trusted Advisor - Depending on the complexity of your estate, your executor may need assistance sorting out the details of your will. This can be an accountant, a family member, or a friend who manages the day-to-day financial responsibilities or someone to counsel with when there are difficulties in the execution. This role is completely optional.
Medical Power of Attorney - This person is responsible for making medical decisions on your behalf, usually in life-or-death situations. They should be familiar with your wishes in regard to what to do if you are ever in a coma or where you would like to pass.
Financial Power of Attorney - This person should be someone you trust deeply and who is able to make financial decisions (like paying your bills) when you are no longer able to perform these actions yourself. Again, discussing your wishes with this person ahead of time will make it easier for them to step into the role when it’s needed.
Designate Distribution to Beneficiaries
You’ve already started thinking about this step when you cataloged your assets. Now it’s time to make it official. For retirement accounts and life insurance policies, you likely already chose who should receive the benefits if you were to pass. However, it’s good to check on your policies and make sure that the beneficiary listed is still correct and that your contingent beneficiaries are noted as well. Now it’s time to designate beneficiaries for all of your other assets.
Compose a Letter of Intent
A Letter of Intent (or Instruction) allows you to provide personal instructions that aren’t in your will for anything that you want your loved ones to know. Some things to consider are burial information like what clothes to bury you in, your obituary, password, and PINs for your accounts, etc. Include whatever information you can give them that will help make things easier when you are no longer with them.
Discuss Your Plans
Talking about your final wishes with your family and friends is an important part of your legacy and will help to ensure that they know what your wishes are. Additionally, discussing the various roles you’ve chosen for the different people you’ve included in your will allows you to gauge if they are up for it.
Duplicate and Distribute Documentation
Now that you’ve made all of these plans, it’s time to make copies and distribute them. We created this checklist of the documents that you’ll want to include. You’ll want to provide a copy for your executor, your spouse (if applicable), and one for yourself.
Save Your Documents
The last step is to save your documents in a place that your family can easily access them when you are gone. An option to consider is a legacy drawer. This is a drawer that contains all of the important information and documents that your family will need all in one place.
Ways To Incorporate Charitable Gifting Into Your Estate Planning
There are many different ways you can incorporate charitable giving into your estate plan. You can include specific charities or causes in your will or trust; create a donor-advised fund; incorporate tax-efficient strategies like “bunching” into larger donations; set up a living trust, or work with an organization that specializes in philanthropic advising services such as helping families select charities they want their estate funds distributed towards after they pass away. With careful planning, there are almost limitless options available for incorporating charitable giving into your estate planning.
Charitable Bequests - What They Are & Why Consider Making One
A charitable bequest is a gift of money or other assets that are donated to a charitable organization as part of an estate plan. The donor specifies the amount and/or percentage they would like to give, and the charitable organization will receive it only after the donor’s death. Charitable bequests can be a great way for donors to make a lasting charitable impact and support causes that are important to them.
There are many benefits to making charitable bequests. For one, charitable bequests can help donors support causes and organizations that are near and dear to them. Donors can also receive tax benefits for charitable gifting, as charitable bequests may reduce the amount of taxes owed on an estate. Making charitable bequests can also provide a sense of satisfaction, knowing that you have made a lasting charitable impact and that your legacy will live on.
Options for Nonprofit Gifting to Consider
When thinking about how you would like your legacy to carry on through charitable giving, it’s important to understand the various options available. A few common choices are donating money or property outright and setting up a donor-advised fund (DAF). By donating money or property outright, you can make an immediate impact on causes that are close to your heart. Donor-advised funds (DAFs) allow donors to recommend grants from the fund over time while receiving immediate tax benefits in the year of contribution. Depending on your personal circumstances, other types of planned gifts may be more beneficial for you; examples include gifts of cash or other assets such as stocks or mutual funds and real estate. Don't forget that non-cash items such as artworks or antiques can be donated too.
When making decisions about your estate plans and charitable works, it is important to seek out professional guidance from attorneys and financial advisors who specialize in this area of practice. They can provide personalized advice that meets all of your needs as well as help simplify the process for you by providing tools such as checklists and worksheets. Additionally, nonprofits are equipped with resources such as gift acceptance policies and tax information that can assist in estate planning decisions. It's also important to remember that any decision should fit into a larger wealth management plan so that all financial goals are taken into consideration when making decisions about charitable gifting.
Types of Charitable Contributions Structures (Living Trusts, Donor Advised Funds)
The charitable giving landscape is complex and ever-changing, making it difficult for donors to know how best to meet their charitable goals. With so many different types of charitable contributions structures available – from living trusts to donor-advised funds – it can be hard to know which structure is right and which will carry out your charitable wishes most effectively.
Creating a trust is an effective way to support nonprofits since it allows for larger sums of money to be distributed at once. This can be done during your life and after your death. With living trusts, you can appoint trustees who will manage the trust assets and distribute them according to your wishes while you’re still alive. Testamentary trusts are set up through wills and become active after the designated person passes away.
Charitable Remainder Trust
A charitable remainder trust (CRT) is an irrevocable trust set up by a donor that pays income, typically in the form of annuity payments or unitrust payments, to one or more individuals until the beneficiary's death. The assets of the CRT must then be transferred to one or more nonprofit organizations upon the death of all beneficiaries. The donor receives an immediate tax deduction for setting up the CRT based on the value of their gift and other factors.
In addition to providing tax advantages, CRTs can provide significant estate planning opportunities. For example, if a donor wants to leave money to charity but also wants some portion of it to go toward funding education expenses for their children or grandchildren, they can use a CRT to at least partially fund such expenses without having to worry about any estate or inheritance taxes being imposed on those funds after their death.
Benefits of Setting Up A Charitable Remainder Trust
One of the greatest benefits of setting up a CRT is that it allows donors to make larger gifts than they normally would have been able to do without incurring huge tax obligations down the line. Donors may be able to utilize existing assets like stocks and real estate in order for them to qualify for a substantial deduction when setting up their CRT.
Since these trusts are irrevocable once established, donors will not have to worry about any changes made by future governments affecting their investments or donations going forward. Lastly, because beneficiaries can choose how much they want to be paid out annually (or semi-annually), they are in complete control over how much money they receive each year from their trust—eliminating any potential surprises down the line come tax time.
CRT At-A Glance
- You are in control and can choose how it is set up and managed.
- You can select the charity that will benefit from the donations generated by your trust.
- You can specify exactly how much money will go to them each year (this amount is called an annuity).
- You can designate someone else (such as family members) to receive income from your trust in the event that something happens to you before it is fully disbursed.
- You retain complete control over your donation plan.
- Deduct a part or all of your contribution from your taxable income for the current year.
- If the trust contains appreciated assets such as stocks or real estate, you pay no capital gains tax when donating these assets.
- In addition to receiving an immediate deduction, you will also save money by avoiding capital gains tax on those donated assets.
Charitable Lead Trust
A charitable lead trust is an irrevocable donation vehicle used to fund charities with income for a specified term. The donor specifies how much money will be donated each year and which charity or charities will receive the funds. The donor also names beneficiaries who will receive the remaining assets in the trust after the donor passes away. This type of trust offers several advantages over other forms of giving.
Advantages of Setting up a Charitable Lead Trust
One of the major benefits of establishing a charitable lead trust is the potential tax savings it can offer donors. These trusts provide significant tax deductions to donors, allowing them to reduce their taxes by donating assets through this type of trust instead of other methods like cash donations or direct contributions to charity. Since these trusts are irrevocable, they provide donors with some assurance that their donations will be used in accordance with their wishes after they are gone. Another benefit of setting up a charitable lead trust is that it allows donors to preserve wealth for future generations while still making an impact on society today.
- Tax Benefits – Donors receive substantial tax deductions from making gifts to charity through their trust. This means that donors can save money on taxes while increasing their charitable giving at the same time.
- Security – A charitable lead trust provides peace of mind by protecting assets from outside influence and guaranteeing that the trust will remain in effect until all funds are distributed according to the donor’s wishes.
- Flexibility – This type of trust allows donors to specify exactly how much money they want to be donated annually and what types of charities should benefit from their generosity. That way, donors can rest assured knowing their legacy will be carried out just as they intended it to be.
By setting up a charitable lead trust now, donors can ensure that their legacy has an enduring effect long after they’re gone by ensuring that money goes towards causes they believe in and also providing for future generations through naming beneficiaries to receive assets from the trusts after they pass away.
Planned giving is defined as the practice of making donations to charities or nonprofits through estate planning. In essence, it is a type of donation that allows donors to make larger gifts than they may have originally thought possible. It allows people with limited resources to make charitable contributions in the form of cash, stocks, real estate, or other assets over time rather than all at once. By setting up a plan with their chosen charity or nonprofit, donors can spread out their donations over several years – allowing them to give more than they initially thought they had available.
Advantages of Planned Giving
Planned giving offers many benefits for both the donor and the recipient organization. For one thing, it enables donors to make larger gifts than they anticipated being able to make. Additionally, because donors are able to spread out their payments over several years (or even decades), they can ensure that the donated funds go directly towards helping the cause close at hand rather than having them lost in administrative costs.
Although there are certain costs associated with setting up such an arrangement – such as legal fees and administrative expenses – these costs pale when compared to the potential benefits offered by participating in this type of philanthropic endeavor. Plus, there are many tax incentives available for those who decide to donate through this method which can help reduce taxable income significantly over time.
An endowment fund is a type of donation that helps non-profit organizations continue their operations in perpetuity. The money donated will be invested, with the proceeds from the investment used to sustain the organization's activities. Typically, these donations are made through charitable bequests, meaning the donor specifies how the money should be used in their last will and testament.
Endowment funds can be set up for specific causes or projects within a nonprofit organization. Oftentimes it's best to donate the funds without restriction so nonprofits can use them in the area of greatest need. Regardless of the specific cause, donors can rest assured that their money is going toward something important and beneficial.
The Benefits of Endowments Funds
Setting up an endowment fund has many benefits for donors and nonprofits. For donors, it allows them to have a lasting impact on causes they care about even after they’re gone. It also provides tax benefits since donations made through charitable bequests are not subject to estate or capital gains taxes. This also helps donors feel more connected to the causes they care about because they can see firsthand how their donation makes a difference over time. Additionally, donors can designate specific areas where they would like their funds to go—such as college scholarships or research initiatives—which ensures that their gifts are being used for the causes that matter most to them.
Nonprofits like NCHS benefit from these funds by having access to steady sources of income even after the initial donation has been spent; this helps ensure that our mission can continue long into the future without interruption or worry about funding shortages.
Endowments also help create stability within organizations by providing a steady stream of income; this allows them to plan ahead for future projects or initiatives without worrying about running out of money midway through the implementation or execution stages. Additionally, because many nonprofit programs rely heavily on paid staff members, having access to reliable funding means that those services can continue uninterrupted as well.
Using a will is another great way to make sure that any gifts given go directly towards charitable causes without being subject to estate taxes or probate proceedings; this ensures that all funds are used as intended. Will-based gifts - or direct gifts - allow you to designate specific amounts of money or a portion of your estate to charities that are important to you.
Your will-based or direct gift can be:
- A specific amount of money to a designated charity's endowment fund
- A monthly stipend
- Cash or other assets
- Stocks or mutual funds
- Non-cash items like artwork, antiques or valuables
Depending on the size of the gift, these types of donations can also qualify for tax deductions if they meet certain criteria.
Donor-Advised Funds (DAFs)
A donor-advised fund (DAF) is a charitable giving vehicle that provides donors with an easy way to manage their donations and have input into which charities they support. This type of fund allows donors to donate assets such as cash or stocks, receive tax benefits, and then allocate where those funds will go. The beauty of a DAF is that donors can remain involved in donating even after they’re gone by designating another person or persons to manage the DAF on their behalf.
From there, the DAF makes distributions from its accounts rather than from the donor’s accounts, which often simplifies record keeping for tax purposes. The DAF also simplifies the process by consolidating multiple donations into one account and providing immediate tax benefits for each donation. Additionally, some DAFs offer other features, such as anonymous giving options for those who wish to remain anonymous when making donations.
Advantages of Donor Advised Funds
A DAF is another great option for those looking for more control over their donations because it gives donors direct access to when and where their funds go throughout their lifetime, as well as after they pass away. It also allows donors to spread out their gifts over multiple years while maintaining tax benefits associated with large contributions in one year due to its unique structure. Donors also have flexibility in terms of how they want the funds distributed, meaning they can choose which organizations receive their money each year and make sure it’s going towards the causes they believe in most deeply.
Donors gain the ability to stay connected with their favorite charities even after they’ve passed away by designating someone else to distribute funds on their behalf. Additionally, donors have control over where their money goes while still enjoying maximum tax benefits associated with charitable giving since all contributions made through the DAF are tax deductible at the time of donation. Finally, many DAFs provide additional services, such as helping donors set up endowments or make gifts in memory of loved ones that have passed away.
DAF At-A Glance
- Donors have more control over where their money goes since they can set conditions on when, where, and how much money is distributed from their fund.
- Tax deductions are available immediately upon setting up the fund.
- The money remains invested in the fund during its lifetime, so it can accrue interest which increases the amount available for distribution.
- The donor’s name will remain associated with the fund for years after they pass away
- It allows donors to easily track contributions and distributions from all sources into one place.
- Donors can also use DAFs to establish scholarships or awards that will carry out their vision beyond their lifetime.
- DAFs provide an ideal platform for families or businesses who would like to create an ongoing philanthropic legacy together.
Tax Benefits of Estate Charitable Gifting
Charitable giving provides many financial and emotional benefits, especially when thoughtfully incorporated into your estate plan. For example, if you donate in the form of an irrevocable gift to a qualified charity, it will not be subject to federal estate or gift taxes. Moreover, if the gifted asset appreciates before it is transferred from donor to charity, any capital gains taxes owed on the appreciation can also be avoided. Additionally, using a donor-advised fund (DAF) allows donors like yourself to take advantage of tax deductions year after year while also supporting multiple charities with one donation.
When thoughtfully incorporated into an estate plan, charitable giving provides many financial and emotional benefits. By gifting an irrevocable donation to a qualified charity, you can avoid federal estate or gift taxes on the asset. Plus, any capital gains taxes due on the asset's appreciation before being transferred will also be avoided. Let’s explore these tax benefits in a little more detail.
The Federal Estate Tax Exemption
The federal estate tax exemption allows individuals to leave up to $12.92 million without owing any federal estate tax (this amount is subject to change). That said, this exemption only applies if the gifts are made during life (as opposed to postmortem). By making a gift to a qualified charity during their lifetime, donors can reduce their taxable estates and take advantage of this exemption should they choose.
The Gift Tax Exemption
In addition to avoiding federal estate taxes, individuals can also make use of the gift tax exemption when donating assets towards charitable causes. For example, if you make a donation during life that exceeds your annual exclusion limit ($17,000 for individuals in 2023), then you may be subject to federal gift taxes. However, these same gifts will not be subject to the gift tax if they are given directly to qualified charities at the end of life.
Capital Gains Taxes Avoided Through Charitable Giving
Finally, by donating appreciated assets such as stocks or real estate directly to qualified charities at death instead of selling them first, donors can also save money on capital gains taxes that would otherwise need to be paid on any profits earned from selling those assets. This is because when assets are gifted directly instead of sold first, donors don’t have to pay capital gains taxes on any appreciation that occurred while they were holding onto those assets prior to transferring them over.
In addition to avoiding taxes on their donations, donors may also receive other financial benefits from their donations. For example, depending on their income level and other factors, donors may be able to take deductions for certain gifts and/or write off some or all of the cost of certain items donated in the form of goods or services. Donors should consult with their financial advisors or tax preparers for advice regarding potential deductions associated with their donations.
Making an estate charitable gift has many tax and financial benefits for donors. By transferring ownership of assets directly from donor to charity in the form of an irrevocable gift, donors can avoid paying federal estate and gift taxes as well as capital gains tax on any asset appreciation before transferral. Furthermore, depending on other factors such as income level and type of donation made, donors may also qualify for additional deductions and write-offs associated with their donations. So it pays (literally) to give.
Beneficiary Organizations In Estate Planning Documents
One of the most important aspects of estate planning documents is designating beneficiaries for any assets or funds left behind when you die. Designating beneficiary organizations, such as nonprofits, can be a great way to ensure that your legacy lives on even after you’ve passed away.
A beneficiary is someone who will receive benefits from a trust, life insurance policy, or retirement account after the grantor (person setting up the trust) passes away. People typically designate family members as their beneficiaries, but they can also designate organizations such as charities or nonprofit organizations. Doing so is a great way to ensure that any remaining funds go towards something meaningful and worthwhile when you're gone.
How To Designate A Beneficiary Organization
Designating a beneficiary organization in your estate planning documents is relatively simple and straightforward. First, you'll need to make sure that the organization meets the requirements of being a qualified charity or nonprofit organization—this means researching the organization's mission and purpose to make sure it aligns with what you want to support with your funds.
Then, consult with an estate attorney who specializes in estate planning. They will be able to provide tailored advice based on your situation and help ensure that everything is done correctly and legally. Once you’ve established which organization(s) you would like to designate as beneficiaries, the attorney will then help update all relevant documents (e.g., wills and trusts) accordingly or once you've identified an appropriate organization, simply include their name and contact information in your will or other estate planning documents where you list out all of your beneficiaries.
It’s also possible for individuals who do not have an estate attorney or estate plan set up yet to designate a beneficiary organization directly on their bank accounts, life insurance, or investment accounts such as IRAs or 401ks. Doing this will allow funds from these accounts to go directly toward the designated organization upon the owner’s death instead of being passed onto other beneficiaries or family members. However, individuals should check with their financial institutions for more information on how this works before taking any action.
The Benefits Of Designating A Beneficiary Organization
Designating beneficiary organizations in your estate planning documents can be incredibly rewarding both during and after life. During life, it provides a sense of satisfaction knowing that you are making an impact on something meaningful while also taking steps to protect those closest to you if anything ever happens. After life, it ensures that any leftover funds will go towards good causes. Plus, this type of giving isn't limited by income level—anyone can do it.
Explain Your Desired Wishes In Detail
When creating plans for gifting during estate planning, it’s important to explain not just what type of gift but why this particular type was chosen instead of another option available. Documenting decisions like these help ensure that future generations will understand why certain steps were taken when passing down legacies through charity work. This includes understanding how nonprofits will use contributions as well as ensuring they meet all legal requirements, such as donor disclosure laws. Finally, having detailed explanations makes it easier for family members and other loved ones to carry out these wishes after an individual passes away or becomes incapacitated due to health issues or age restrictions.
It’s never too late—or too early—to start planning how you want your legacy remembered after death. Incorporating charitable gifting into an effective estate plan requires thoughtful consideration and expert advice from professionals who specialize in this area. With the right resources, tools, and support network, you can protect the financial well-being of those closest to you and leave behind a lasting legacy through supporting causes close to home or around the world. By taking the time now to plan, you can ensure that future generations reap the rewards of your wisdom and generosity.
With thoughtful consideration and proper planning—and the help of trusted advisors—you can provide long-term support for important causes while reducing taxes when applicable. You will enjoy peace of mind knowing that everything is taken care of according to your wishes after death. NCHS has put together planned giving worksheets, checklists, and this guide related to philanthropic planning to help make the process go more smoothly.
Create your estate plan today and make sure your legacy lives on. Take advantage of the opportunity to protect your loved ones and support important causes by planning your estate today and including charitable bequests. If you need help, reach out to an estate planning professional. For assistance with charitable or legacy giving, reach out to our trusted and experienced team. Don't wait – create a secure future for yourself and those you love now!
Since 1893, Nebraska Children’s Home Society (NCHS) has held the fundamental belief that children come first.
By providing a variety of services, community resources, and educational programs, we work to help you make an informed decision regarding your parenting role.
Our services range from educational classes for new parents, family-centered activities to encourage fathers to become more involved in their children’s lives, support groups for grandparents caring for their grandchildren, and connections with certified specialists to help you determine the best course of action for you and your family.
Regardless of where you are in your parenting journey, we can connect you with the resources you need to strengthen your skills and make an informed decision.