Navigating the complexities of estate planning and charitable giving can be daunting, but with the right tools and guidance, you can help donors make a meaningful impact and ensure that their legacy endures for generations to come.
Our toolkits and professional support (even for the smaller charity) provide you with the resources and expertise you need to maximize the impact of donor gifts, educate on minimizing tax burdens for heirs, and leave a legacy that reflects donor values and goals. Whether you are considering endowed funds, charitable trusts, or other giving strategies, our toolkit will help you navigate the planned gift process with confidence and ensure that gifts do the most good for the causes your donor cares about.
When helping a donor plan their estate, it is crucial to consider not just how their assets will be distributed after passing, but also the tax implications and financial responsibilities their heirs may face. Leaving behind a legacy involves more than just passing on wealth; it is about reassuring donors that heirs can effectively manage and benefit from the assets a donor leaves behind. Here are some key considerations to keep in mind when setting up planned gifts:
Understanding Tax Implications
Distinct types of assets left behind after a donor’s passing can have varying tax implications for heirs. Many types of financial accounts may require heirs to pay income tax when distributed; capital gains taxes are also a consideration with appreciated assets. Discuss with donors if they would prefer legacy giving options that circumvent these taxes.
Considering the Sale of Inherited Real Estate
The sale of inherited real estate can be a complex and lengthy process, with costs associated with the sale and any debts becoming the responsibility of the heirs. It is essential to have a discussion between the donor and heirs about these potential costs and help the donor plan accordingly. Making real estate a charitable gift could be an option to make an impact while lifting a burden.
Understanding the Heirs' Financial Needs
Before making planned gifts, it is important to have your donor engage in a conversation with their family about their financial needs, and how their assets can best support them, and which can affordably be donated to a nonprofit. Consider the financial situations of each heir and their ability to support themselves. The donor may be able to afford a greater charitable impact than they first believed!
Making Your Planned Gift a Family Affair
Consider involving the family in the legacy giving decision-making process. Hold a family meeting to discuss how the donor’s family wants to be remembered, and how a planned gift can help improve the world. By involving family, a donor can ensure that their charitable legacy reflects their family’s values and goals.
Leaving a Named Legacy
Represent the values of a family through a named endowed fund, which will support the charity of their choice for generations.
Some Giving Tools to Consider
Learn more about establishing endowed funds and charitable trusts, which can benefit both charitable causes and heirs. You can also name charities as partial or full beneficiaries of several types of financial accounts.
In conclusion, making planned gifts that work for good and for the heirs requires careful consideration of tax implications, financial responsibilities, and family needs. By planning and involving family and donor values in the decision-making process, you can help the donor ensure that their legacy reflects their philanthropic goals and benefits both heirs and the causes they care about most.
