Estate planning covers more than just financial matters. Indeed, many use their estate plan to pass along their values as well as their wealth. One way to do this is to give thanks with your estate plan, by designating charitable giving or specific gifts that will help ensure your legacy. It is important, however, to balance your income and the needs of your beneficiaries with the available tax incentives. 

Your Legacy

While the general purpose of estate planning is to ensure you and your family are taken care of when most needed, you do not need to contain your estate planning to financial issues. Indeed, many individuals use estate planning to pass along family history and traditions through their giving. An estate plan may specify how a beneficiary can use their inheritance such as for studying abroad, embarking on a particular trip, or other values that are important to the giver. In addition, you can choose to give to a qualified charitable organization in your will so that the gift is distributed upon your death or incapacity. Giving to charity during your life or after you have gone can help significantly reduce federal estate and gift taxes and allows you to support charitable causes that are meaningful to you. 

One way to pass along your values as well as your wealth is an incentive trust. An incentive trust is a type of trust that includes provisions that reward a beneficiary for achieving a specified range of desired goals or behaviors. The trust may also indicate how the money may be distributed. Another estate planning tool is the charitable lead trust, which allows payments to be made to the charity during the settlor’s lifetime. When the settlor passes away  – or at the end of a shorter term of the settlor’s choosing – the remainder of the assets in the trust go to the decedent’s estate, his or her spouse, or other beneficiaries. A third way to continue your legacy is through a donor-advised fund. A donor-advised fund is similar to a charitable investment account with the specific purpose of supporting charitable organizations. Pre-funded charity gifts can help your family decide which organizations will be financially supported. 

These are just some of the estate planning tools available for charitable giving and allowing you to pass along values and give thanks with your estate plan.

Estate Planning Professionals 

No matter what your goals regarding your estate plan, it is important to craft a plan that takes advantages of the tools and tax benefits available to you under applicable law. We can explain the options available to you and your family, and help create the best plan to suit your needs. Give us a call today.