Using Estate Planning Tools to Further Your Philanthropic Efforts

Everyone has different goals for estate planning. Some people want to ensure their loved ones are taken care of, provide for future generations, or protect generational wealth. Others may want to ensure that their estate continues to support the same charities and philanthropic goals they had when they were living. Many want to do both. One of the great things about estate planning is that it lets you decide now what kind of legacy you want to leave behind, and each estate plan can be customized to the unique needs and goals of the individual. If charitable contributions and donor-direct giving are essential parts of your estate plan, the team at The Dodds Law Firm, PLC, can help you create a strategy that continues these efforts after you’ve passed.

Philanthropic Goals for Estate Planning

For many people, leaving an impact on the world after they have passed away is essential. They want to ensure that their estate plan continues to support the values they have held during their lifetimes and leave a lasting legacy behind. For some people, this may be supporting a specific cause or charity. Someone who struggled with breast cancer, for example, may want to donate part of their estate to the Breast Cancer Foundation. Someone who loves animals may wish to leave their assets to the local Humane Society or an animal shelter. 

Other common philanthropic goals for estate planning include establishing foundations or scholarships that can continue to help others long after the person has passed away. It is even possible to use estate planning to encourage family members to support these same values. For example, you may put assets into a trust with a family member as a beneficiary and leave instructions that a portion of the funds must be donated to a charity of the beneficiary’s choosing. 

No matter your reasons for wanting to make charitable giving a focus of your estate plan, The Dodds Law Firm, PLC, is here to help. We can suggest options based on your goals and help you create an estate plan that reflects your exact wishes.

How to Leave Assets to Charity

If you want to ensure that all or part of your estate goes to a charity or other philanthropic organization, there are a few options. 

Through a Will

A last will and testament is the simplest and most direct way, and you can even bequeath specific assets or a percentage of the total estate, depending on your wishes. A will is also easy to change if you need to alter it at some point. However, it does need to go through probate, which means that the estate has to be settled before the gift can be distributed.

In a Charitable Trust

Both a charitable remainder trust and a charitable lead trust can help you leave your assets to an organization or cause that’s important to you. A revocable trust still offers the same flexibility as a will in that it can be changed or revoked at any time, but it has the added benefit of avoiding probate. If you set up an irrevocable charitable trust, it also has the rights of a qualified beneficiary. A trust can be especially helpful if you want to leave a large gift or you have particular instructions for how the assets should be distributed. 

Naming a Charity as a Beneficiary of Accounts

It is also possible to name a charity as a direct beneficiary of an account. Common options include life insurance policies, 401(k)s and other retirement accounts, bank accounts, and investment accounts. When you name a charity as a direct beneficiary of a financial account, the funds do not need to go through probate and can be directly transferred to the trust on your death. To set this up, you only need to deal with some paperwork to designate the beneficiary, and you still have the option of making changes throughout your lifetime.

How to Choose the Right Estate Planning Strategy

Whether you want to leave your entire estate to a charity or you want to balance your philanthropic goals with providing for your descendants and other family members, having an estate planning strategy is essential. An attorney can help you make choices that support your goals while considering your financial situation and your specific philanthropic interests. They can also help you use tools like trusts and transfer-on-death arrangements to ensure that both your loved ones and charitable interests are supported. 

Working with an estate planning attorney can also help you avoid potential family disputes by ensuring that your wishes are clearly communicated in your estate planning documents set up according to Arizona’s laws. Depending on the options you choose, there may even be charitable deductions to help decrease federal estate taxes and ensure there’s more of your estate left for both heirs and philanthropic organizations. 

If you’re interested in how you can continue your philanthropic efforts with your estate plan, contact The Dodds Law Firm, PLC. We will schedule a time to talk with you about your needs and goals and what you want your legacy to look like. We can provide guidance on which estate planning tools and strategies best fit your needs and get started on an estate plan that gives you peace of mind and contentment, knowing you can continue to support meaningful causes even after you’re gone. Call our office in Surprise, Arizona, at 623-267-0026 today to get started.