Feeling Charitable? Giving Is Within Your Reach

October 4, 2021 Austin F DuBois

Being charitable – it is a wonderful trait that we value in others and to which many of us aspire in our lifetimes. Every time I talk to people about charitable giving, the situation often unfolds like this: an individual or couple has assets that they really would love to give to their favorite charity but, almost always, they express the same two concerns. What if I need it? What if my children need it?

Anybody, Any Asset Level.

The great news is that anybody at any asset level can afford to be charitable, even while they take care of their kids, and especially the beloved grandkids, into the future. Charity is not beyond your capacity, and there are myriad options you can explore simply by talking with an experienced elder law attorney.

As a firm, charity is certainly something we value. We are always on the look-out for opportunities to give back to our community in meaningful ways, so working with similarly “charitably-inclined” clients is something we enjoy very much. With all of the legal vehicles available to people who wish to make donations from their assets, the key to helping them is to carefully consider their big picture and choose the one that makes the most sense for them.

3 Ways to Get Started
Here are three basic options we can pursue. And please note, within these options there are multiple facets that can be tailored to meet basically anyone’s specific needs or requests.

  1. An Estate Plan

A sound estate plan cannot be beat – not for general planning purposes and not for charitable giving! Among the many benefits an estate plan affords you (pun intended), it is the single greatest vehicle to set up donations to your favorite charity from assets. By working charitable giving into your estate plan, you can take advantage of strategies that apply several types of trusts, each of which can be tailored to manage your assets and giving goals. Trusts allow you to retain control over your situation to make you feel comfortable, including assets, beneficiaries, and trustees.

  1. A Will

Your will lets people know what your last wishes were and is the legal document that will see them through. Your will can indicate exactly how much of your assets should be given to your favored charity when the time comes. People have used their wills to set up what are known as legacy gifts. You can also use your will to set up a schedule of planned giving. The process of making charitable donations through a will is reasonably straightforward but is best guided by an experienced elder law attorney familiar with the less intuitive steps that can be taken to maximize your donations and minimize your concerns.

  1. A Retirement Account

Some folks want to talk about using the retirement account they have earned over the years to achieve their charitable goals, even while they’re still alive. That is doable, but retirement accounts can tend to be a little tricky, often with lots of rules and regulations attached. Take a look back at this blog for a refresher on retirement accounts. Overall, if your financial forecasts look good – and the sign-off of a financial advisor is suggested – a retirement account can be a good place to draw from for charitable giving. The process is going to earn you a tax write-off and you will not have to worry about any income tax being paid out of the charitable distribution.

Giving Is Within Your Reach

Inheritances are meant to help children and grandchildren navigate their own futures in comfort and with confidence, so no one wants to risk anything that would diminish that potential nest egg. To reassure those clients, I offer this analogy.

Let us say your home is worth $250K and you have two children. If your home is the primary asset that you plan to pass along to them and they plan to sell it rather than move in, there are legal vehicles available to you to earmark a fraction of that home value to go to your favorite charity. The remainder of the money is directed to your beneficiaries. So, determining that a modest $5K goes to your charity, means your children are still going to receive $122.5K each. Your giving goals are met, the kids are going to be okay, and the charity is going to be very appreciative for a donation of that size.

There are many more options like this one out there (and others that are not like it at all, but equally effective in other ways) to help you realize your charitable goals. You can give while you are still alive. You can give as a part of your legacy.

In my 15 years of doing this, I have found that there are only better ways of being charitable. The more you explore, the more suitable options you will find, and an established elder law attorney can help you explore the nuances of each one. There are options to make the most of it, and we are here to have that conversation.