Year-End Giving: Make an Impact That Lasts
The desire to make a difference doesn’t stop when we’re gone—and your estate plan is the perfect way to ensure your impact lives on. Whether you’re dreaming of creating a scholarship fund, advancing medical research, or giving back to your local community, incorporating charitable giving into your Estate Plan can help you support the causes you love while offering tax benefits for your heirs.
This season is all about giving back and planning smart. Let’s explore how thoughtful charitable planning can turn your generosity into a lasting legacy.
Exploring Your Charitable Giving Options
When it comes to leaving a lasting impact through your estate plan, you’ve got options. The goal is to find an approach that aligns with your values, priorities, and overall strategy. Here are some ways to make it happen:
Direct Bequests: The easiest way to include charity in your plan is through a direct bequest in your will or trust. A bequest simply means leaving a specific gift—money, personal belongings, or even a percentage of your estate—to your chosen charities.
Why It Works: It’s simple, flexible, and can be updated if your circumstances change.
Tax Advantage: Bequests to qualified 501(c)(3) organizations are tax-deductible, reducing your estate’s tax liability. Want the tax benefit now? Make an outright gift—up to $18,000 in 2024 (or $19,000 in 2025) per recipient without triggering gift taxes.
Qualified Charitable Distributions (QCDs): If you (or your parents) are over 70.5 and don’t rely on Required Minimum Distributions (RMDs) from retirement accounts, this option is a win-win.
How It Works: Transfer up to $105,000 in 2024 (or $108,000 in 2025) directly from your RMDs to a qualified charity.
Benefits: Save on taxes, support a cause you care about, and potentially drop into a lower tax bracket.
Charitable Trusts: For those with larger estates, charitable trusts offer a strategic way to support both your family and your favorite causes.
Charitable Remainder Trust: Provides income to your beneficiaries for a set period, with the remaining assets going to charity.
Charitable Lead Trust: Sends income to charity first, with the remainder passing to your heirs.
When to Use: Ideal for reducing capital gains taxes during major asset sales.
Donor-Advised Funds (DAFs): Looking for flexibility and ease? A donor-advised fund lets you contribute during your lifetime and recommend grants to your favorite charities over time.
Why Choose This: Minimal admin effort compared to a private foundation.
Legacy Factor: Name successor advisors to keep your charitable giving alive after you’re gone.
Pro Tip: Let’s chat about using your DAF with intention to maximize its impact.
Family Foundations: For families with significant wealth and a vision for multi-generational impact, a private foundation is the ultimate giving tool.
Why It’s Powerful: You control the investments, governance, and distributions, all while fostering a culture of philanthropy within your family.
Legacy Building: Educate and involve the next generation in charitable giving.
Maximizing the Impact of Your Charitable Giving
To ensure your generosity leaves a lasting impact, keep these key factors in mind:
Tax Implications: While the joy of giving should always come first, smart planning can enhance your impact. Certain strategies, like those we’ve discussed, can reduce estate taxes and even provide income tax benefits during your lifetime. With the right approach, you can give more and save more, too.
Timing of Your Gifts: Deciding when to give matters. Giving during your lifetime allows you to see the impact of your generosity firsthand while unlocking potential immediate tax benefits. Alternatively, posthumous gifts ensure your legacy continues to support causes you care about.
Choosing the Right Charities: Not all organizations are created equal. Take the time to research and select charities that align with your values and demonstrate a strong track record of using donations effectively. Consider whether you want to support a well-known national organization or make a difference closer to home with a smaller local charity. Thoughtful planning ensures your charitable giving is meaningful, effective, and aligned with your vision. Let’s work together to make your generosity count!
Engaging Your Family in Charitable Giving
Charitable giving through your estate plan does more than support meaningful causes—it’s also an opportunity to pass down philanthropic values to future generations. Here are some ways to make giving a family affair:
Start with Family Conversations: Discuss your charitable goals and the causes that are close to your heart. Sharing your motivations can inspire your loved ones and encourage them to think about their own giving priorities.
Collaborate on Decisions: If you establish a donor-advised fund or family foundation, invite your children or grandchildren to help make grant decisions. This involvement not only fosters a sense of responsibility but also gives them hands-on experience in philanthropy while carrying on your legacy.
Turn Giving Into a Learning Opportunity: Use charitable planning to teach younger family members about financial responsibility, the importance of social issues, and giving back to the community. It’s a great way to equip them with tools for both life and legacy.
Designing Your Charitable Giving Plan
As your Personal Family Lawyer®, I’m here to help you create a charitable giving strategy that reflects your values and seamlessly integrates with your overall estate planning goals. Together, we’ll:
Pinpoint the causes that matter most to you.
Choose the best giving vehicles for your unique situation, whether that’s direct gifts, trusts, or donor-advised funds.
Maximize your tax benefits while ensuring your generosity makes the greatest impact.
Document your charitable wishes so everything is clear and legally sound.
Plan for multi-generational involvement to pass down your philanthropic values.
And because life happens, I’ll ensure your plan is flexible enough to adapt to changes in family circumstances or charitable organizations over time.
While estate planning often focuses on the future, charitable giving lets you start creating your legacy today. Thoughtfully incorporating philanthropy into your Estate Plan not only supports the causes you care about but also provides valuable tax advantages for your loved ones.
How We Help You Build a Lasting Legacy
At 20West Legal, we specialize in helping you design a comprehensive Life & Legacy Plan that incorporates charitable giving strategies tailored to your values and goals. We’ll work together to:
Properly document your philanthropic wishes.
Structure your giving for maximum impact and tax benefits.
Keep your family out of court and conflict, no matter what.
With your charitable giving plan in place, you can feel confident knowing you’ve created a meaningful legacy that benefits both your loved ones and the causes that mean the most to you.
Click here to schedule your complimentary 15-minute consultation and get started on your charitable giving legacy today: https://go.20westlegal.com/meeting-scheduler
This article is a service of 20WestLegal LLC. We don't just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That's why we offer a Planning Session, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love. You can begin by calling our office in Sudbury, Massachusetts today to schedule an Estate Planning Session and mention this article to find out how to get this $750 session at no charge.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.