By Kim Alvarez, Vice President – Philanthropy, The Foundation for Enhancing Communities
National Estate Planning Awareness Week runs October 19 through 25. A signal to everyone that the call is to “make a will” is good advice, of course, but a thoughtful estate plan usually involves much more than a single document. And if charitable giving is important to you, making sure all the pieces work together can be especially important.
More Than One Document
Think about the different ways assets can pass at death. Some assets may be distributed under a will or according to the terms of a revocable trust. Other assets, including IRAs, retirement plan accounts, life insurance policies and certain financial accounts, may pass according to beneficiary or transfer on death designations.
Ways to Include Charitable Giving in Your Estate Plan
All of this means creating the legacy you envision requires thinking not only about who and what you want to support, but also about how particular assets will get there. For example, suppose you would like part of your estate to eventually support charitable causes through The Foundation for Enhancing Communities (TFEC). Depending on your circumstances and goals, you and your estate planning advisors might consider approaches such as:
- Naming a fund at TFEC as beneficiary of an IRA or other retirement account. You can generally designate a charitable beneficiary to receive all or a percentage of your IRA or retirement account, while leaving other assets to family members or other beneficiaries. Traditional retirement accounts are particularly worth discussing with your advisors because distributions that may be taxable to individual beneficiaries can generally be received by a qualified charitable organization, including TFEC, without the same income tax burden.
- Leaving a specific dollar amount through your will or trust. Perhaps you want $25,000, $100,000 or another amount to establish or add to a fund at TFEC. Your attorney can incorporate the appropriate language into your estate planning documents.
- Leaving a percentage of your estate through your will or trust. Instead of specifying a dollar amount, you might direct that a percentage of your estate pass to a charitable fund. A percentage gift can adjust as the value of your estate changes over time.
- Creating a fund to support favorite organizations or causes. Your estate gift could establish or add to a designated fund to benefit an organization you care about, or an area of interest fund supporting an issue or area of interest that has been meaningful to you.
- Leaving a gift to meet changing community needs. You might instead leave all or a percentage of your estate as an unrestricted gift to TFEC. This approach gives TFEC the flexibility to put charitable dollars to work where they can make an important difference as needs and opportunities change over time.
Making the Pieces Work Together
These approaches don’t have to stand alone. Charitable components of your estate plan might incorporate more than one document, beneficiary designation, asset or type of fund to accomplish your goals. Setting up a charitable giving structure can also be especially important if you are anticipating a business exit at some point in the future. Planning ahead may give you and your advisors more flexibility to consider how charitable giving fits alongside the financial and estate planning decisions that come with selling or transferring a business.
Creating a Legacy That Reflects What Matters to You
For these reasons, National Estate Planning Awareness Week is about more than simply checking “make a will” off your to-do list. It is an opportunity to look at your entire estate plan and ask whether your documents and beneficiary designations work together to reflect the people, organizations and community you want to support.
If charitable giving has been an important part of your life, the Philanthropy Team at TFEC would be honored to help you think about how it can become part of your legacy, too. We can work alongside your attorney, CPA and financial advisor to help you explore charitable options and determine what type of fund may best carry out your intentions for generations to come.
Take the Next Step in Your Planning
If charitable giving is part of the legacy you hope to leave, Kim Alvarez, TFEC’s Vice President of Philanthropy, would be glad to help you explore what that could look like. She can work alongside you and your professional advisors to consider options that reflect the people, organizations and causes that matter most to you. Reach Kim at 717-236-5040 or kalvarez@tfec.org to begin the conversation.
