Don’t let quagmire of estate planning bog down charitable bequests
July 13, 2015
An increasingly large percentage of the U.S. population does not have a will or trust. In 1998, 61 percent of people over age 55 created one of these documents. Today, the number of people who plan ahead has dropped to about 51 percent. Why is it so hard to make our estate plans?
Having just done this work personally, I can attest to how difficult it was just to get to the point of making that appointment.Even more challenging was then facing the multitude of decisions in the process. Estate planning was beyond complicated. It was a quagmire.
As CEO of the Community Foundation of Western Nevada, I know charitable bequests are an important part of estate planning for a significant number of people. Like the myriad of other decisions about your estate, making charitable bequests comes with a feeling of gravitas and permanence.
At the Community Foundation, we meet with people and their attorneys as they are thinking about their charitable goals. Philanthropic services offered at the Community Foundation can help you learn more about your charitable interests. We help people figure out if they want to concentrate their philanthropy on a focus area or restrict it to a single project or program.
Charitable bequests are an important part of estate planning for a significant number of people. Like the myriad of other decisions about your estate, making charitable bequests comes with a feeling of gravitas and permanence.
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We talk about the relative merits of giving the chosen charities a single large gift or providing them with an annual income stream. Charitable gift planning often leads to discussion about family. Some charitable bequests through a charitable trust use the bequest to provide an income stream for a spendthrift descendant and incorporate the tax advantages planning into your estate plan.
It is remarkable to me how many people have written large bequests to charity because they feel their children don't manage their money well. Informed by chronic patterns, parents worry that any substantial outright gifts have a high probability of being squandered or spent to finance dangerous habits and addictions.
They feel better knowing that their hard-earned money will provide care for neglected seniors, support treatment programs or preserve the open spaces for everybody's children.
Will your descendants or family feel resentful about the amount of the charitable gifts you are including? Do they feel entitled to your entire estate? Will they be hurt if left a bit less? In addition to astute gift tax planning, the Community Foundation can help you work on ways to mitigate these sensitive issues.
How do you decide where to give your charitable gifts so they do the most good?
Should you restrict your charitable bequest to a particular program or geographic area? Do you nail it down to specifics or provide general charitable support? Does the charity get it all at once or do you provide them with an income stream? These are important subjects to resolve.
The Community Foundation works with generations of families to meet their philanthropic interests from serving on a scholarship selection committee to recommending grants from the family charitable fund as donor-advisors.
The Community Foundation can administer your charitable plans and make sure they are carried out exactly as you intend. We are here for the long run, and 50 years from now could be awarding a scholarship you created to a student whose values and goals match the ones you want to encourage.
Once you're done with the planning, there are still decisions left to be made. Do you tell your family about your plans? Do you inform the charities you named that they will one day receive a bequest? Do you feel comfortable letting them know the amount? Do you write an ethical will?
In spite of the cumbersome process, it is true that once you've got all of your plans in place you do find a kind of peace. You don't go it alone — the professionals, charitable gift planners at the Community Foundation and your estate attorney will guide you through the morass of decisions. The benefits of making your estate plans far outweigh the discomfort that comes with the planning process.
Thinking of the good you will accomplish with your charitable gifts will bring you satisfaction and real happiness. My wife and I signed our estate documents on the last day of June. We made it through the quagmire and are better for it — as will be our family and our community.
Chris Askin is the president & CEO of the Community Foundation of Western Nevada, a public charitable foundation that strengthens our region through philanthropy and leadership by connecting people who care with causes that matter.