For estate planners who want to include charitable giving as part of their estate plan, they should be familiar with the process and how estate planning tools can help them set up their charitable plan. Incorporating charitable giving can be an important part of estate planning which is why there are estate planning options to help.
Three steps for setting up a charitable plan included in an estate plan:
- Choose a charitable cause: The first step is for the estate planner to choose a charitable cause that is important to them. Because it is a cause that may receive ongoing or substantial support, the estate planner should ensure it is important to them and their family.
- Choose the assets to give: Once the estate planner has selected the philanthropic cause they want to support, they can select the assets they plan to give which can include assets they plan to give in the future. Donations can, of course, include cash but may also include real estate, privately-held securities or even artwork. The ability of the charity to manage more complex assets that are donated can depend on the sophistication of the charity.
- Determine how to make the gift: Lastly, the estate planner should determine the best vehicle for the gift they are giving. Tax implications is a consideration they will likely want to take into account at this stage, if not sooner. Both wills and trusts can be used to make charitable gifts and the tax benefits of each option should be weighed when determining the best vehicle.
Leaving a legacy
Setting up a charitable giving plan as part of an estate plan can be an important part of the estate planning process for some estate planners. For that reason, all those who are beginning the estate planning process should understand the steps and considerations and how estate planning tools can help them achieve their philanthropic goals.