"Not for ourselves alone are we born; our country, our friends, have a share in us" is a famous phrase by the Roman philosopher Cicero. While the phrase is several thousand years old, it still has great applicability to estate planning today, because many people are still seeking to leave a legacy of good for their community and friends after they pass on.
Leaving A Legacy Of Good
Americans are generous people. In the United States, charitable contributions by individuals make up a vast majority (72%) of all charitable donations to nonprofit organizations. In fact, the State of New York ranks fifth in overall charitable contributions, with individual donors making an average charitable contribution of $5,150 annually. In addition, these same charitable donors also make will bequests that are, on average, almost triple the amount of their lifetime donations.
Legacy considerations and estate planning are relevant for everyone, regardless of their economic status, marital status, or age. Estate planning is not just for the wealthy, and it is not just for married people with children. In fact, many people come to realize they feel strongly about the idea of leaving a legacy after they experience a life changing event such as a divorce, spousal death, retirement, new job, change in economic circumstances, or health crisis.
While many people are interested or intrigued by the idea of creating a legacy, they often do not know where to begin the process.
If you are considering using your wealth for good after you pass on, sometimes the best place to begin the estate planning process by considering your core values and asking yourself what general type or types of charities or causes you wish to support. Possible charitable classifications and causes include:
-Animals- including animal rights, animal welfare and services, wildlife conservation, zoos and aquariums
-Arts, Culture and Humanities- including libraries, historical societies, landmark preservation, museums, performing arts, public broadcasting and media
-Education- including universities, graduate schools, technology institutes, private elementary and secondary schools, other educational programs and services
-Environmental- including environmental protection and conservation, botanical gardens, parks, and nature centers
-Health- including diseases, treatment and prevention services, and medical research
-Human Services- including children's and family services, youth development, shelters, crisis prevention services, and food pantries
-International- including relief services, humanitarian relief, and international peace and security
-Public Benefit- including advocacy and civil rights, fundraising organizations, community foundations, and community and housing development
-Religion- including religious activities, religious media and broadcasting
Ways Of Leaving A Legacy
There are several gifting strategies and wealth transfer tools that can help an individual to leave a legacy for his or her family, friends and community, including the following:
1. Including specific bequests in a will- a will provides a simple plan for distributing personal and real property. A bequest can specify a particular piece of real or personal property, or it can be general in nature, such as cash.
2. Establishing a trust- there are several types of trusts which can be used depending on a donor's intentions and goals. Three of the most common are life insurance trusts, revocable living trusts, and irrevocable gift trusts. Trusts are often useful for avoiding probate, as well as reducing estate taxes.
3. Designating a beneficiary designations on life insurance policies, IRAs, retirement plans, and annuities- these assets are automatically distributed upon your death, which generally allows them to avoid probate.
4. Setting up a donor-advised fund with a community foundation- community foundations provide grants and scholarships to nonprofit organizations in a designated area. A donor-advised fund gives some control over distribution of funds while sharing administrative costs with other funds held by the foundation.
Creating a legacy plan is an important reason to embrace the idea of estate planning. Your donations can give lasting meaning to your life and make a significant difference in the lives of others. Please contact Ettinger Law Firm at (800) 500-2525 ext. 100 if we can help you with your estate planning needs.