Legacy planning is going to involve a consider amount of soul-searching. Of course you’re going to want to make decisions regarding what you give to your loved ones, but you also want to consider how you give it. It is not always as easy as simply handing over a lump sum of money to everyone that you want to remember because different people are at different stages of life and have different proclivities when it comes to handling money.
You don’t want to do more harm than good by giving a loved one too much too fast, and at the same time an inheritance with strings attached can lead to resentment. So the matter has an emotional side as well as the financial side.
Along these lines, when you’re planning your estate you are in fact planning for your death to put it bluntly. Most people would like to feel as though they were in the best possible graces as their final days approach, and to this end many are inspired to engage in philanthropic efforts when they are creating an estate plan.
One very popular and efficient way to give to charities would be to make contributions into a donor advised fund. With these funds you can recommend that multiple charities receive grants from the assets you contribute, but you can do this after making a single contribution. So you don’t have to contend with mountains of paperwork coming from various different sources if you want to support multiple charities. Plus, you get a charitable deduction for the year that you make the contribution even if you don’t make any grant recommendations until after that year has come to a close.
Contributing into a donor advised fund provides the tax advantage of removing the assets that you contribute from your estate for estate tax purposes. And, no capital gains tax is applicable to securities that you donate into a donor advised fund. To gain a more detailed understanding of how donor advised funds can fit into your overall estate plan, simply arrange for a consultation with an experienced legacy planning attorney.