What is Planned Giving?

Toward the end of the year and beginning of the New Year, you may think about your legal, financial, and tax planning. You may also consider giving to one or more charitable organizations. Combine these together and you have the opportunity to address estate planning issues while making a gift during your life or upon your death. Simply put, it’s the process of Planned Giving.

Planned gifts include artwork, bequests, real estate, closely held stock, life insurance, tangible personal property, life income plans (shared income funds, annuities, and remainder trusts), and more. Each gift provides various benefits.

Keep reading to learn more about planned giving.

These Are the Top Things You Ought to Know about Planned Giving

You, Your Heirs, and the Charitable Organization Receive Benefits

Not only can you receive tax deductions, but you may receive a financial benefit. For example, a charitable remainder trust provides you with an income stream. At the time of your death, the charity receives whatever funds are left in the trust. On the other hand, a charitable lead trust provides a stream of income for the charity. At the time of your death, your heirs receive the funds remaining in the trust. If a charity is the beneficiary of your life insurance policy, the organization would receive the funds.

You Choose Your Planned Gift Options

You may choose your planned gift options to benefit your children and grandchildren. By involving your family in your planned giving, you can teach and share with them your philanthropic values. The seed you plant today about giving can be an example for future generations.

You Need a Will or Trust

During your estate planning, you’ll want to review your will or Trust. If you don’t have one, your attorney can create the document at this time. Having a will or Trust ensures that your estate will continue to produce benefits to your family and the charitable organizations that matter to you. Most importantly, a will or Trust ensures that your wishes are carried out at the time of your death.

You Should Consider the Goal of Your Estate Plan

What is the goal of your estate plan? Is it to make sure loved ones, especially underage children, are taken care of? Is it to leave a legacy through planned giving? Or a combination of both? It’s important to think about the goal of your estate plan while considering the needs of your loved ones and planned giving at the same time.

Do You Have an Estate? Ask about Planned Giving

One of the reasons why ‘planned giving’ incorporates financial and tax benefits is because it’s a great way to motivate people to support nonprofit organizations. It really serves two purposes. The first is to support causes that matter to you or you deem worthy. On the other hand, it can help you to make more considerable gifts while addressing your own financial needs.

If you have an estate plan but haven’t thought about planned giving, you may want to speak with your attorney or your accountant. Consider your current and future financial and tax position. Think about your loved ones and what you’d like to bequeath to them. Perhaps you could discuss your estate plan with your family to ensure that your wishes are met, descendants are cared for at the time of your death, and you leave the legacy you want to leave.

Are you married? Download this estate planning worksheet and start designing a plan that will meet your goals!