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How testators can arrange for charitable giving in an estate plan

On Behalf of | Apr 18, 2024 | Estate Planning

People in different life situations have different estate planning priorities. Many adults simply want to leave as much as they can for their closest family members. Others want to leave behind a charitable legacy. Someone who faced unique challenges in life might want to start a scholarship fund for individuals facing similar challenges. People may also want to donate to existing charities that benefited them or their loved ones at some point in their lives.

Charitable giving is a respectable choice for those with resources, but it can potentially lead to conflict after someone dies. The family members of the deceased individual might resent the loss of property that they might otherwise have inherited and might try to challenge an estate plan that includes substantial charitable contributions.

How can someone effectively leave resources for charity as part of a broader estate planning strategy?

By creating a trust

Charitable trusts are useful inclusions in the estate plans of those who want to give back when they die. Trusts are harder to challenge than wills and can therefore be useful if people expect that their loved ones may be upset about their decision. They also provide more long-term control over the use and distribution of the assets someone has in their name at the time of their death. Trusts can hold resources and may include rules to only use the interest accumulated through investing those resources to help fund scholarship programs or make annual contributions to a non-profit organization.

By leaving clear instructions in a will

Someone with sufficient resources to provide an inheritance for their loved ones and give to charity may not have to worry about their families fighting their wishes. They could potentially create an estate plan in which they earmark specific assets for their loved ones and then designate the remainder of their property to a charitable cause.

Someone might leave their home and financial resources to chosen beneficiaries and may provide instructions to liquidate any remaining personal property and use those funds as a donation to a charity of their choosing. They might also leave the choice of the charity to their family members while leaving instructions about the type of charity that they would prefer to support, such as an organization that researches cancer or helps autistic students.

Integrating charitable giving into an estate plan typically requires careful consideration. Those who take appropriate steps to earmark assets for charitable causes can leave behind a specific kind of meaningful legacy after their passing.