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Want to make an impact in the world now and after you’re gone? We highly recommend including charitable giving in both your financial and estate planning! Let’s look at how careful planning means your philanthropy won’t have an expiration date—it will keep going, creating a legacy that echoes your values and generosity for years to come.
Charitable Giving During Your Lifetime
There are several ways to include charitable giving during your life. Whether it’s a one-time donation, monthly donation, or annual donation, gifting during your life allows you to witness the positive impact you are making. You should also have a power of attorney in place and as appropriate, authorize your agent to continue making charitable gifts that aligns with your wishes.
Another option considered by higher-net-worth individuals is to create a charitable remainder trust or annuity. These options involve making a significant donation to an organization while receiving some lifetime benefit or income from that contribution. Upon your passing, the charity will retain the principal or balance of your gift. Utilizing Charitable Trusts and Annuities can have significant tax advantages and financial benefits, including capital gains tax avoidance and reducing or eliminating estate tax.
Charitable Giving as Part of an Estate Plan
If you want to include charitable donations in your estate planning, there are a few ways to do it. One way is to bequeath (give) an asset—like stocks or bonds—to a charity by naming the charity as beneficiary. Alternatively, you can include the charity by name in your will or trust.
How much can you donate? That’s up to you! You can leave the charity everything you own, earmark a specific dollar amount, or allocate a percentage of your estate. Working with an experienced estate planning attorney will ensure that your wishes are carried out after you pass. Experienced attorneys will also include contingency plans in the event the charity no longer exists when your will or trust becomes effective.
Are Online Will Makers a Good Solution for Including a Charity as part of Your Estate?
While online will creation tools may seem convenient to bequeath money to your favorite charity, you may want to reconsider using them. Wills and Trusts must be drafted and executed in accordance with applicable law. The failure to strictly adhere to the legal requirements leaves open the possibility of a successful contest by unhappy beneficiaries, or worse yet, a determination that the will or trust is invalid and the laws of the state of domicile control. There is no statutory law that automatically includes a charity as part of a deceased person’s estate. Therefore, if a will or trust is determined to be invalid, the charity will likely get nothing. Additionally, the questions prompted by these platforms often only encompass some of the essential details needed for comprehensive estate planning.
That’s why a seasoned estate planning attorney is worth the cost. Their expertise allows them to delve deeper in your personal situation, asking pertinent questions that may reveal pitfalls or options that are not immediately apparent to you. For instance, you may desire to bequeath your assets to a charity, but would you want your spouse or disabled child to benefit from the asset first? An attorney can guide you through these scenarios, ensuring all necessary factors are discussed and well thought through.
And, the same caution applies to the online power of attorney forms! In New York State, for a power of attorney document to name a giving agent, a statute requires specific language that isn’t actually included in the statute. This could be easily overlooked in a DIY form, because, as the saying goes, “You don’t know what you don’t know.” And when that power of attorney is needed in a time of crisis, it’s heartbreaking to find it was not worded correctly or is otherwise invalid.
A Note to Nonprofits
It’s become increasingly common for charities to encourage supporters to use free online will services to secure donations. While I understand the initial appeal of getting something for “free”, there’s a higher risk that the governing document could be invalidated, and your charity might not receive the intended donation. Encouraging potential donors to seek professional legal advice when planning their estate is a better idea. This way, donors can ensure their documents are legally sound, and their generosity can effectively support your organization!
Make a Lasting Impact
In conclusion, while charitable giving can be a powerful way to make a lasting impact, it’s just as essential to ensure it is done in a manner that aligns with your goals, life situation, and all applicable laws. Whether you donate during your lifetime or as part of your estate plan, consider seeking guidance from an experienced attorney. This will help ensure your donations have the desired impact and that your estate benefits from any potential tax advantages. Remember, it’s not just about giving; it’s about giving smart. So, take the time to consider your options, make informed decisions, and create a legacy that will stand the test of time.
COUNSEL WITHOUT JUDGEMENT
At Meier Law you can count on us to provide counsel without judgment in all areas of estate planning and administration. They strive to make their clients to feel comfortable and secure while developing their estate plans by being skilled, direct, and honest with every individual they serve. Meier Law understands the gravity of each situation and strives to earn your trust so we can advise you in the best way possible. If you have any questions or concerns about creating an estate plan, don’t hesitate to call and schedule a consultation!
Meier Law Firm is committed to playing an active role on the team of professionals that help you and your loved ones maintain the best quality of life. To learn more about their Long-term Care Planning Services, visit TheMeierLawFirm.com
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