Wednesday, November 02, 2011

Charitable Giving Through Legacy Planning

Most of our readers and clients are concerned about more than just making a will or trust; they want to leave a legacy which reflects their values and beliefs. One popular way to do this is to make charitable giving a part of your estate plan; but you don’t have to wait until the end of your life to make your charitable contribution, this article from the New York Times reveals how current tax rules can allow any philanthropically-minded person to give more to a favorite charity right now.

According to the article, “One way to increase the tax savings — and consequently what you can afford to give — is to give appreciated assets to a qualifying charity instead of cash.” These “appreciated assets” can include stocks with long term gains, real estate, artwork or collectibles. Giving appreciated assets such as real estate, collectibles, or the like may not be as simple as giving cash—instead it “is complicated with a lot of little rules”—but in the end, “the benefits can be substantial.” Not only for the recipient of the gift, but for the donor as well. “Very large gifts may also reduce a donor’s taxable estate.”

If your interest lies in long-term rather than one-time-only giving then you may want to consider “setting up a donor advised fund through a community foundation or a financial institution... [This] allows the donor to put money in one year and get the tax deduction, but spread the gifts out over several years.” In fact, this particular method of charitable giving lends itself perfectly to the long-term legacy planning that so many clients prefer.

We know that creating an estate plan and financial plan is about much more than simply providing for your family monetarily. Designing these plans can also be about exploring your family’s values, continuing to give to the causes that have been important to you throughout your life, and perhaps encouraging your children or grandchildren to know the joys of giving as well. Our firm can help you design a financial legacy that will last for generations.