You’ve worked hard throughout your life, accumulating assets and building your legacy. Now, you’re starting to think about the future, and you may be wondering, “How can I leave a mark on the world that lasts long after I’m gone?” The answer could lie in combining your estate planning with your philanthropic endeavors.
Incorporating philanthropy into your estate plan allows you to continue supporting the causes you hold dear, while also providing potential tax benefits. You could consider a variety of strategies such as setting up a charitable trust, donating assets directly to a non-profit organization or establishing a donor-advised fund.
Charitable trusts: Caring for loved ones and charities
A charitable trust allows you to provide for your loved ones and your chosen charity simultaneously. After transferring assets into the trust, it provides an income to your designated beneficiaries for a specified period. Once that period ends, the remaining assets go to your chosen charity.
Direct donations: Making an immediate impact
If you’re interested in making an immediate impact, you may choose to donate assets directly to a charity. Besides making a difference in your community, this move could provide significant tax deductions, potentially reducing your estate’s future tax burden.
Donor-advised funds (DAFs): Flexibility for your philanthropy
Finally, a donor-advised fund can be an effective tool for those who want flexibility. After contributing to a DAF, you can make grant recommendations to various charities over time while enjoying an immediate tax deduction.
Remember, estate planning is not just about distributing assets. It’s about creating a lasting impact. With philanthropy integrated into your estate plan, you can leave a legacy that truly reflects your values and the causes you care about. It’s a unique opportunity to make a significant, lasting impact.