Leaving money to a charity in your will
Including philanthropy in your estate plan requires asking yourself a few key questions.
What kind of legacy do you want to leave?
Many people want their wealth to help sustain an organization or advance a cause they care about. When considering philanthropy in your estate plan, think about whether you want to focus on one organization or issue or if you want to support multiple organizations or issues that reflect a broader vision for your legacy.
When do you want to start giving?
You can include philanthropy in your estate plan by building a directive into your will to donate a specific amount of money to a particular organization. But you don't have to wait until you die to begin transferring those funds. You can also start giving directly while you are still alive by gifting directly to a charitable organization or by setting up a charitable trust.
Have you considered a trust?
Depending on the size of your endowment, you might want to consider creating a trust to maintain some control over how the funds are used. For instance, you can create a revocable or irrevocable trust and name an organization as a beneficiary — along with any other recipients you choose. You can also set up a charitable trust that lets you make charitable payments to a qualifying organization during your lifetime. How you transfer assets to a charitable organization can affect your personal and estate taxes, so be sure to consult with an estate planning or tax professional when developing your plans.
Have you shared your plans with your family?
Talk to your heirs about your vision for your legacy so they are not surprised by the directions you leave in your will — particularly if it involves leaving bequests to charities. Letting them know your plans in advance can help them avoid confusion down the road and potential conflicts among your beneficiaries.