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8 Gifts to Consider During Estate Planning

According to Crescendo Interactive, an estimated 70% of Americans don’t have a will.

Through proper estate planning, the legacy of love and care you leave for your family and friends can be encouraging and even inspiring.

Before discussing how you want your assets to be distributed after your lifetime, it’s important to know the options at your disposal.

The following list includes eight planned gift options to consider when leaving your legacy.

8 Ways to Leave Your Legacy

  1. Donor Advised Funds
    Many families find that a Donor Advised Fund is a simple and efficient way to enact positive change in their communities. By establishing a fund, you can time the gifts you make (for investment or tax reasons) and you can select the impact areas or nonprofit organizations you wish to support. Some families use a Donor Advised Fund as an estate beneficiary so their children or friends can supervise gifts from their fund for years to come – also a good way that way to encourage children to be involved in philanthropy.
  2. Charitable Endowments
    Another option that you may prefer is to leave property or money in an endowment fund so the fund and your name remain forever. Your endowment fund can be set up to benefit designated charities or particular causes that are important to you, similar to a Donor Advised Fund. The annual spending limit of the endowment ensures that your fund and the charities will have permanent money for grants.
  3. Living Trusts
    If you have a moderate or large estate, you may find it desirable to create a living trust. The living trust is completely within your control during your lifetime. You can add property to the trust or remove property from the trust at any time. During your lifetime, the trust income is taxable to you. It’s important to note that the property in the living trust will avoid probate, potentially saving thousands of dollars in costs and a lengthy court process.
  4. Custom Estate Plan for Business, Investments or Special Needs Child
    If you own a family business, substantial real estate holdings or a large estate, then a custom plan should be considered. Another custom plan option is important if you have a child with special needs. Through a special needs trust, your child is better able to receive care by providing resources and directions from the trust while preserving important benefits.
  5. IRA, 401(k) or Other Retirement Plan
    Your IRA, 401(k) or other retirement plan is transferred by a beneficiary designation. The beneficiary of the qualified plan is typically coordinated with your entire estate plan, benefitting your spouse, your family or your trust. The qualified plan can also go to charity which avoids the payment of deferred taxes on the plan, increasing the amount of the gift.
  6. Life Insurance
    A permanent or term life insurance policy is a contract, and there is a beneficiary designation form. You will select the primary and contingent beneficiary to receive the life insurance proceeds if you pass away.
  7. Charitable Remainder Trusts
    A charitable remainder trust combines substantial tax savings with the ability to produce a very good income for you or your family members. Charitable remainder trusts are especially helpful for individuals who retire and would like to sell land or stock tax free and receive a generous income.
  8. Charitable Gift Annuity
    If you fund a charitable gift annuity, you receive a substantial income tax deduction and fixed payments for life. A gift annuity may pay for one life or for two lives. For a married couple, the payments will last for both spouses’ lifetimes, then the balance will go to your charitable fund.

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