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Planned giving in an estate plan

Charitable giving does not have to be a standalone process. Rather, when supporting charities is among a person’s goals, they can incorporate their charitable giving into their larger overall plans, such as their estate plan, through planned giving.

There are many different varieties of planned giving, including: planned gifts to charity during one’s lifetime, leaving gifts to charity in one’s will and the use of charitable trusts (such as a charitable lead trust or a charitable remainder trust).

Why might a person want to do their charitable giving through planned giving incorporated into their overall estate plan rather than just standalone giving? Well, there are many special rules and legal issues present when it comes to charitable giving which can create some special opportunities for tax and financial benefits in relation to such giving. Planned giving can give a person a chance to develop a strategy to take full advantage of these opportunities so as to maximize the positive effect the gift would have for them, their family and the organization they are donating to.

Planning one’s charitable giving in connection to their overall estate plan could also help a person with ensuring their charitable giving strategy is consistent not just with their charitable giving goals, but also with their overall goals for what to do with their wealth.

As with other aspects of estate planning, when incorporating planned giving into one’s estate plan, the specific details (such as what type of planned giving is decided on and what particular terms end up being set for such decided-on charitable giving mechanisms) matter greatly. These details can impact whether the planned giving will have the effects a person wants it to, or will instead have unintended effects. So, when making planned giving decisions in their estate planning, a person may want guidance from an attorney skilled in estate planning matters.

Source: Forbes, “What Is Planned Giving?,” Russ Alan Prince, July 5, 2016

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