Almost everyone is familiar with Legacy Giving. It is the passing of financial assets and property at death. Whether we like it or not, at death our financial assets and property are passed on. Legacy Giving can be highly intentional. However oftentimes, it is not intentional and the consequences of unintended Legacy Giving can be dire. But if we receive good advice, put some thought into what our legacy goals are and understand our options, we can prevent a lot of the unintended consequences that hurt our families and relationships. Additional costs that may result from a lack of planning ahead include financial stress, extra cost, time, hassle, and the payment of unnecessary taxes and fees.
Let's first look at some examples of Legacy Giving that will help us, as donors, relate to the concept and get us thinking about our own plans. Since Legacy Giving is about the passing of financial assets and property at death, there are already a number of examples that we come across daily. For example, beneficiary designations on our IRAs insurance provide the opportunity to be very intentional with our Legacy Giving. Other examples of Legacy Giving may include bequests in our wills, the titling of our homes and real estate, and the use of child trusts.
Since we are talking about the charitable aspects of Legacy Giving, there are many tools and techniques that are available to fulfill your charitable intent. For example, charitable gift annuities, donor-advised funds, and charitable lead trust and charitable remainder trust all serve specific purposes. Life insurance policies and retirement accounts such as regular IRAs and 401ks are also tools that can be used to fulfill charitable intent.
Since Legacy Giving occurs at death, you, as a donor, will have some kind of impact. It will be either intentional or unintentional. There is a great deal of personal satisfaction and joy in planning your giving legacy; especially if done with thought, planning, and professional guidance. You can tailor your legacy to have a specific social impact. This impact can range from bettering others' lives, improving the environment, or having an impact on a specific cause, passion or nonprofit that is important to you. You can also have a tremendous impact by perpetuating family values and passing on family heirlooms and memories. If charitable giving is important to you as a donor, and you would like to see this value perpetuity passed on to your family, your children and grandchildren, intentional legacy planning is a good way to accomplish this. It can be used to give you joy and satisfaction while perpetuating family values and simultaneously helping those causes that are important to you.
To help facilitate the perpetuation of family values through charitable Legacy Giving, it is important to engage your children and grandchildren in a way that is best suited for your family circumstances. An advisor in philanthropy can provide the guidance, tools, and techniques used to incorporate a charitable Legacy Giving component in your overall estate plan. By integrating your Legacy Giving in your estate plan, you should also ensure the administrative structures and details are addressed. This will ensure your charitable intent is fulfilled and your estate is passed timely and efficiently avoiding unnecessary administrative hassles, extra costs, and family confusion or discord.
In comparison to Stewardship Giving and Impact Opportunity Giving, Legacy Giving is a one-time event. As a one-time event, and because you will not be around, investing time and thought in creating your own personal and family legacy now is crucial. When creating your personal Legacy Giving plan, remember families, situations, and the tax laws may change. Hence your charitable Legacy Giving plan should be reviewed every 3-5 years or in the event of some other significant change such as the birth of a child or grandchild.
Coming up next: How to use a donor advised fund (DAF) to enhance your personal legacy.