Estate Blunders #7 Forgetting About Charities That Are Important To You
Including Charitable Giving in Your Estate Plan
Charitable giving can be an important part of an individual’s life, and it is essential to ensure that your charitable goals are incorporated into your estate planning documents. Here are some practical steps to help you ensure that your charitable giving is included in your estate plan.
Identify Your Charitable Beneficiaries
The first step in including charitable giving in your estate plan is to identify the charities and causes that are important to you. Consider the organizations you have supported during your lifetime and those you would like to continue supporting after your death. You can also consult with family members or friends to identify charities that align with your values and priorities.
Determine How You Want to Support Your Charities
Once you have identified your charitable beneficiaries, you should determine how you want to support them through your estate plan. There are several options available, including:
Charitable trusts: A charitable trust is a legal entity that is established to manage assets for the benefit of a charity or charities. Charitable trusts can provide significant tax benefits and allow you to provide ongoing support to your chosen charities.
Bequests: A bequest is a provision in your will that directs a portion of your estate to a charitable organization or organizations. Bequests can be a simple and effective way to support charities after your death.
Lifetime gifts: You can also make charitable gifts during your lifetime, which can provide immediate support to your chosen charities and may also provide tax benefits.
Consult with an Estate Planning Attorney
It is important to work with an experienced estate planning attorney who can help you incorporate charitable giving into your estate plan. Your attorney can help you identify the best strategies for supporting your chosen charities and can ensure that your estate planning documents reflect your charitable goals and priorities.
Examples of the Consequences of Forgetting About Charitable Giving
To illustrate the potential consequences of forgetting about charitable giving in your estate planning, here are some fictional but realistic examples:
Example 1: John is a lifelong supporter of his local animal shelter. However, he fails to include the animal shelter in his estate planning documents when he passes away. As a result, his assets are distributed according to the default rules of his state’s probate law, and the animal shelter receives nothing.
Example 2: Mary wants to support several charities after her death, including a local food bank and a national environmental organization. However, she fails to specify which charities should receive her support in her estate planning documents. As a result, her beneficiaries are left to decide which charities to support, and they cannot agree on how to distribute Mary’s assets. This leads to a prolonged legal dispute that delays the settlement of her estate and creates tension among her loved ones.
Example 3: David has a significant amount of wealth and wants to make a meaningful impact through his charitable giving. However, he fails to consult with an estate planning attorney and does not incorporate his charitable goals into his estate plan. As a result, his assets are distributed in a way that does not align with his values and priorities, and his charitable wishes are not fulfilled.
Conclusion
Charitable giving is an important part of many individuals’ lives, and it is essential to ensure that your charitable goals are incorporated into your estate planning documents. By identifying your charitable beneficiaries, determining how you want to support them, and working with an experienced estate planning attorney, you can ensure that your assets are used in a way that aligns with your values and priorities and that your charitable goals are achieved. Don’t forget to consult with an estate planning attorney to ensure that your charitable giving is properly integrated into your estate plan.
