The primary focus of estate planning is to direct where our wealth goes when we are no longer here. Whether we use Wills, Trusts or Beneficiary Designations – the goal is to assure that the assets go to the correct individuals or entities in the proper amounts.
As we approach the holidays, we will all be contacted by many charitable organizations requesting a gift for this year. Without those gifts, charities would be unable to operate and achieve their goals. Many of us regularly give to the same charities annually – some small gifts, some large gifts. It is estimated that 85% – 95% of adults make at least one charitable gift each year.
How does that fit in with our estate planning goals? Apparently, not as well as you would expect. Only 5% of estate plans make provisions for charitable gifts. Why the disparity?
While some may be accounted for by tax benefits – end of year contributions to charities are tax wise for many individuals – or at least they see it as the government assisting in their gift. Yet, many would give even if the tax benefits were not available.
Most individuals who engage in estate planning are older – their children are often grown and out of the home. There is no need to worry about giving money to the children so older adults feel comfortable in giving extra funds to charitable causes that they believe in. Somehow, when they get ready to do estate planning, there is a disconnect. They once again return to the idea that all of their wealth should be passed on to their children.
This is an area where family discussion could lead to a different outcome. Family discussions of charitable ideas – the family vision and values – would promote a greater understanding by the next generation. They would understand that they would not be the recipients of all of their parents’ wealth The children would recognize their parents’ passions and values; they would appreciate those institutions that were important to their family and honor the gift.
For parents who are interested in instilling charitable values in their children, it could become a family tradition to discuss giving and jointly select those institutions and causes that would receive an annual contribution. When charitable giving becomes a part of a family tradition, it gets passed down with the other family values. It would also promote an understanding by the children and an admiration by them when a portion of their parents’ estate is gifted to causes important to the family.
A discussion of charitable giving should be a part of all estate planning discussions. It should also be a part of family discussions as well. Impart your values to your family by demonstrating how much you care for the charities that are close to your heart.