Estate planning can seem scary if you’ve never broached the topic before, but there are many ways to make the conversations a bit less overwhelming. If you are making an estate plan for the first time or revising an existing one, you should consider how philanthropy might fit into your estate plan.
While the tax code changes depending on the political climate, in general, it makes financial sense to incorporate philanthropic plans into your estate plans. From higher tax deduction percentages, to five year carry overs, to lowering your taxable estate total, there are many ways that philanthropic giving can be crafted within your estate plan. These vehicles allow you to address your specific financial, family, and philanthropic situation. Do you have a child that will need special care after you are gone? Do you have an asset that will be subject to significant capital gains taxes? Are you on a fixed income right now but have significant non-liquid assets? From charitable gift annuities to funding trusts with retirement accounts or even life insurance policies, there are a number of financial vehicles that are specific to incorporating your giving that can be utilized to meet your financial and personal goals.
Beyond the financial incentives, incorporating philanthropy into your estate planning is an important way to transfer values to family members. This is a way to demonstrate to your family what resonates with you, and also put a tangible action behind it, which is one of the many reasons we believe having ongoing conversations with your family about intent is so important. Additionally, if you choose to share some of your philanthropic plans with the organizations that they benefit today, they will want to show their appreciation, which can often times become further opportunities to demonstrate values in action to family members. However we caution our clients to not be too specific with their plans, things change over the years and organizations or causes may take different forms. Trust that you’ve selected the right executors of your estate and have taken the time to help them understand your intent today.
Starfish Impact is not a financial, legal, or tax advisor, and is providing the following information for guidance based on our experience working with a variety of clients.
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