Leaving a Lasting Legacy Through Giving and Strengthening Your Estate Plan Along the Way

Charitable giving isn't just a way to support causes you care about. It can also be a powerful tool for shaping the kind of legacy you want to leave behind. Whether you're passionate about education, health care, faith, or local community development, the way you give can reflect your values.

Charitable giving can do more than allow you to make an impact after you’re gone. It can offer tax advantages and play a useful role in your broader estate plan. With the right approach, it’s possible to support meaningful causes, reduce estate tax exposure, and preserve more wealth for your heirs.

Defining the Legacy You Want to Leave

Legacy planning and estate planning are two separate but intertwined processes. Legacy planning is less focused on how assets will be distributed and more about defining and actualizing the imprint you want to leave on the world.

Legacy planning can involve people, causes, or communities that matter most to you. For many individuals and couples, this includes supporting nonprofits, faith-based organizations, or universities that reflect their values.

Some choose to leave a specific dollar amount or percentage of their estate to a favorite charity. Others go a step further and build giving into the structure of their estate, using tools that allow for ongoing or strategic impact.

Incorporating Charitable Giving Into Your Estate Plan

Bequests in a Will or Trust

You can name a charity as a beneficiary of a specific amount, a percentage of your estate, or a particular asset, like real estate or stock. This is one of the simplest ways to give and can be adjusted as your priorities evolve.

Beneficiary Designations

Retirement accounts, life insurance policies, and donor-advised funds can be directed to charitable organizations by simply updating the beneficiary paperwork. This bypasses probate and allows for fast, direct transfers.

Charitable Trusts

A charitable remainder trust (CRT), for example, provides income to you or your heirs for a set period before passing the remainder to a charity. This can reduce your taxable estate and may offer income or capital gains tax benefits as well.

Tax Benefits of Giving Strategically

Charitable giving can provide immediate and long-term tax advantages depending on how it's structured. For example:

• Assets donated to qualified nonprofits are typically excluded from your taxable estate.
  

• Donating highly appreciated assets, like stock or property, can help you avoid capital gains tax while still getting a deduction.
  

• A charitable trust can generate income tax deductions, provide lifetime income, and reduce estate tax liability.

Balancing Giving With Family Goals

Leaving something behind for loved ones and giving to charity aren’t mutually exclusive. In fact, many families find that charitable planning opens up new conversations about values, priorities, and what legacy really means. In some cases, family members are involved in helping direct donations or even managing a donor-advised fund that allows them to continue giving over time.

Your estate plan can be designed to provide for your heirs while also reflecting the impact you want to make beyond your lifetime. The key is to be intentional and diligent in researching and vetting organizations. Map out what matters to you and find a strategy that reflects both generosity and financial wisdom. You can maximize the impact of your legacy planning by finding reputable partners you trust to wisely use your dollars.

Working With Estate, Tax, and Financial Planning Professionals Who Understand Your Vision

Legacy planning isn’t one-size-fits-all. The best approach depends on your assets, your goals, and the types of causes you want to support. A team with investment management and financial planning experience can help you evaluate options, establish trusts, or efficiently invest in donor-advised funds that align with your goals.

Most people give to charity because it aligns with their values, not because of the tax benefits, but there’s nothing wrong with giving in a way that does both. Learn more about making charitable giving a lasting part of your legacy by calling (623) 974-0300 to schedule a meeting with Fullerton Financial Planning.