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Legacy giving: A conversation that’s full of opportunity

August is National Make-A-Will Month. This means you may be reading articles and hearing about estate planning more this month than usual, which makes the next few weeks an especially good time to review estate plans–or get your wills and trusts in order if you haven’t done so yet.

Charitable giving is an important part of any estate planning conversation. Certainly, bold, legacy-making plans are frequently in the news because of the high-profile people who establish them. Your clients may not realize that they, too, and nearly anyone, really, can leave a legacy to support favorite charitable causes.

By discussing what legacy charitable gifts are, how they work, what the client has in mind, and then formalizing the plan with the proper legal and financial documentation, you can up a few of “life’s loose ends” far in advance of when that legacy gift is actually made—and give have the peace of mind of knowing it will actually get done.

Charitable giving intentions and the possibility of establishing legacy gifts should be a routine and standard topic of any financial or estate planning discussion, right alongside provisions in an estate plan for family and loved ones.

Here’s a primer to help you simplify the process of thinking about leaving a legacy:

Q: What is a legacy gift to a charity?

A: Think of leaving a charitable legacy as a post-life gift that is structured in advance. Legacy gifts are often referred to as planned giving.

Q: What assets can be used to make a legacy gift?

A: Like the gifts to charity that you are already making during your lifetimes, cash, stock (especially highly-appreciated stock), real estate, life insurance, and an IRA beneficiary designation (which is extremely tax effective), are examples of assets that can be the subject of a legacy gift. A legacy gift can be expressed in a person's estate planning documents as a dollar amount, a percentage of the whole, or a legacy gift of the assets themselves. You will want to choose assets carefully, enlisting expertise from a financial advisor to do so.

Q: How is a legacy gift actually made?

A: Legacy gifts are typically spelled out in detail in a will or trust documents. This is especially important because after the donor is gone, too much is otherwise potentially subject to hearsay or conflict. To attorneys, accountants, and financial advisors, this is common sense. But a surprising 2 out of 3 Americans have no estate planning documents!

Q: How can a discussion about legacy gifts help motivate clients?

Estate planning can be an uncomfortable topic because, by definition, it requires a person to contemplate mortality. This is likely part of the reason that 40% of Americans say they won’t even consider putting a will in place unless or until their life is in danger. Most people think charitable giving, though, is a much more pleasant topic than discussing the end of their own lives. That’s why legacy giving is a topic that can help break the ice and pave the way for the broader, essential conversation about overall estate planning.

Q: What are some particulars to be aware of?

A: Most legacy gifts can be revoked or altered through beneficiary or will changes while the client is alive. This is an important feature to mention to someone who want to include charitable giving in their estate plans but like the idea of flexibility as the overall family and financial picture changes over the years.

Q: What tools does the community foundation offer to help?

A: A particularly useful technique is for a client to establish a fund at the community foundation that spells out the client’s wishes for charitable distributions upon death to specific organizations. The client’s estate planning documents can, in turn, simply name the fund as the beneficiary of charitable bequests. The client can adjust the terms of the fund anytime during the client’s lifetime to reflect evolving charitable priorities.

We look forward to working with you to firm up legacy giving plans, whether in August or anytime of year!

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