Your estate plan is about more than deciding who receives your property. It is also an opportunity to express your values and support the causes that have mattered to you during your lifetime.

I've worked with clients who have charitable passions and wanted to include those in their estate plan.  One client left a rental property to Leader Dogs for the Blind.  No one in the family wanted her house, so she donated it to the charity who could sell it and use the funds.  Another client had a passion for her local library.  That client left a bequest to the Friends of her library organization to assist with programing at the library.

Whether you care deeply about education, faith, medical research, animal welfare, the arts, or your local community, charitable giving can become a meaningful part of your legacy. And you do not need an exceptionally large estate to make a difference.

Start with the Causes That Matter to You

Before choosing a legal or financial strategy, think about the impact you want your gift to have. Ask yourself:

·       Which organizations or causes have been important to me?

·       Do I want to support a specific program or a charity's overall mission?

·       Is my goal to make one gift, or to provide support over many years?

·       Do I want family members to participate in carrying out my charitable wishes?

Your answers will help your estate-planning attorney and financial or tax advisors recommend an approach that fits your goals.

Include a Charitable Gift in Your Will or Trust

One of the simplest options is to leave a gift to charity through your will or revocable living trust. The gift may be:

·       A specific dollar amount;

·       A particular asset, such as real estate or investments;

·       A percentage of your estate; or

·       All or part of what remains after other gifts and expenses have been addressed.

Using a percentage can be especially helpful because it allows the charitable gift to rise or fall with the value of your estate. It may also make it easier to balance charitable goals with gifts to family and other beneficiaries.

The charity should be identified carefully. Your plan should generally use the organization's correct legal name and, where appropriate, its address and tax-identification number. It is also wise to address what should happen if the organization changes its name, merges, or no longer exists when the gift is distributed.

Consider Beneficiary Designations

Some assets pass outside a will or trust through a beneficiary designation. Depending on the asset and your circumstances, you may be able to name a charity as a beneficiary of:

·       A retirement account;

·       A life-insurance policy;

·       An annuity; or

·       Certain bank or investment accounts.

You may name a charity to receive the entire asset or only a percentage. Beneficiary designations can be efficient, but they must be coordinated with the rest of your estate plan. The designation on file with the financial institution or insurance company—not a conflicting statement in your will—generally controls where the asset goes.

Retirement accounts can require special attention because distributions may have different tax consequences depending on whether the beneficiary is an individual or a qualified charity. Your attorney and tax advisor can help determine whether these assets are a good fit for your charitable plan.

Explore Gifts That Can Benefit Both Charity and Family

Some planning arrangements can divide benefits between a charity and individual beneficiaries. For example, a charitable trust may be structured to provide payments to family members for a period of time, with the remaining property later passing to charity. Another structure may provide benefits to charity first and transfer the remaining property to family members later.

These arrangements can be useful in the right circumstances, but they involve detailed tax and administrative rules. They are generally most appropriate when the size of the gift, the type of asset, and the donor's goals justify the added complexity and expense.

Use a Donor-Advised Fund or Private Foundation

A donor-advised fund allows a donor to make a charitable contribution to a sponsoring organization and recommend grants to eligible charities over time. In an estate plan, a donor-advised fund may offer flexibility if you want trusted family members or advisors to help recommend future grants.

A private foundation can provide even more control and may create an ongoing role for family members. However, foundations also require careful administration, tax reporting, and compliance. For many families, a donor-advised fund may offer a simpler way to continue a tradition of giving.

Decide Whether to Restrict the Gift

You may want a charity to use your gift for a particular purpose, such as scholarships, research, building maintenance, or a specific community program. A restricted gift can help carry out that intent, but a restriction that is too narrow may create problems if the program changes or no longer exists.

Before adding a significant restriction, consider speaking with the charity. The organization may have preferred language and can explain whether it is able to administer the gift as intended. Your estate plan can also give the charity or a fiduciary limited flexibility to apply the gift to a similar purpose if the original purpose becomes impractical or impossible.

Choose the Right Assets

Not every asset is equally suitable for a charitable gift. Cash is straightforward, but appreciated investments, retirement assets, real estate, closely held business interests, and tangible property may present different tax, valuation, or administrative issues.

A charity may be unable or unwilling to accept certain property, particularly an asset that is difficult to manage or sell. For a substantial noncash gift, discuss the proposed transfer with the charity and your professional advisors before finalizing the plan.

Coordinate Charitable Giving with the Entire Estate Plan

A charitable provision should not be drafted in isolation. It may affect:

·       The amount available for family members and other beneficiaries;

·       Estate liquidity and the payment of debts, taxes, and expenses;

·       How taxes and administration costs are allocated;

·       Which assets fund particular gifts; and

·       The responsibilities of the trustee or personal representative.

Your will, trust, beneficiary designations, account titles, and any charitable-giving documents should work together. Review them after major life events and whenever a charity changes its name, mission, or structure.

Make Your Intentions Clear

Good charitable planning combines generosity with precision. Clearly identify the recipient, the amount or percentage of the gift, any permitted purpose, and what should happen if the original plan cannot be carried out. It may also be helpful to tell your family and fiduciaries about your charitable goals so the gift does not come as a surprise.

A Lasting Expression of Your Values

Charitable giving can turn an estate plan into a lasting expression of the people, institutions, and ideas that shaped your life. The right approach depends on your assets, family circumstances, tax considerations, and the kind of impact you hope to make.

An estate-planning attorney can help you compare the available options, coordinate the necessary documents, and create a plan that supports both the people you love and the causes you care about.

This article is provided for general informational purposes only and does not constitute legal or tax advice. Estate-planning and charitable-giving strategies should be evaluated based on individual circumstances and applicable law. Consult qualified legal and tax professionals before acting.