Estate Planning | Making a Difference One Family at a Time

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Hartford estate planning attorneysFor some people, philanthropy is part of their everyday life. If you are one of those people, you may also wish to continue your charitable gifting after you are gone. With that in mind, a Hartford estate planning attorney at Nirenstein, Horowitz & Associates, P.C. explains how you can incorporate charitable gifting into your estate plan.

Making Charity Part of Your Legacy

If philanthropy is part of your deeply held belief system, why not make it part of the legacy you hand down to your loved ones when you are gone? The first step in making that happen is to define your charitable gifting goals. Philanthropy can take many forms and can be directed at a seemingly endless number of beneficiaries. You may not be able to continue all your charitable gifting in your estate plan; however, you can certainly incorporate enough to make it part of your legacy. Take some time to decide which recipients and/or which type of gifts are most important for you to incorporate in your estate plan.

Why Your Last Will and Testament May Not Work Well for Charitable Gifts

You can make charitable gifts in your Will; however, there are a number of reasons why making gifts in your Will is not the best option. To begin with, using your Will to make charitable gifts means you will almost surely miss out on tax benefits that would otherwise be available when making charitable gifts. In addition, when you make a direct gift in your Will, you lose all control over how that gift is used once the transfer is complete. Finally, if you hope to involve your children, or other younger relatives, in your philanthropic endeavors, you will need to use a more complex method of continuing your charity work.

Options for Making Charitable Gifts

If your goal is to continue your charitable gifting after you are gone, and make you philanthropy part of your legacy, you may wish to consider the following options:

  • Charitable Lead or Charitable Remainder Trust – charitable lead and charitable remainder trusts are specialized trusts that allows you to gift to both a charitable and a non-charitable beneficiary. With a charitable lead trust (CLT) a charitable beneficiary receives distributions from the trust for a specific period of time first. At the end of the designated time period, the remaining assets are distributed to the non-charitable beneficiary. A charitable remainder trust (CRT) works in reverse with the non-charitable beneficiary receiving distributions first and the remainder going to the charitable beneficiary.
  • Charitable Gift Annuity – in some ways a charitable gift annuity is similar to a trust. You make a donation of cash, or other assets needed by the charity, in return for which you, or another beneficiary (or more than one beneficiary), receives a fixed annuity payment for a designated period of time.
  • Private Foundation – a private foundation is the most complex, yet most potentially rewarding, option. A private foundation is a non-profit organization that manages its own funds and can be used to make charitable gifts to numerous and varied causes. Because of the cost involved in setting up and operating a foundation, this option is only practical if you plan to donate a sizeable amount to charity in your estate plan. Along with numerous tax advantages, one of the biggest benefits to creating a private foundation is that it gives you the opportunity to involve future generations in philanthropic gifting in a hands-on manner. As the creator of the foundation, you can establish guidelines for what type of gifts will be made and what type of beneficiaries will be considered; however, your children, grandchildren, and future generations will be able to experience charitable gifting first-hand through the operation of the foundation.

Contact a Hartford Estate Planning Attorney

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to include charitable gifting in your estate plan, contact an experienced Hartford estate planning attorney at Nirenstein, Horowitz & Associates, P.C. by calling (860) 548-1000 to schedule an appointment.

Barry D. Horowitz, Estate Planning Attorney
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