What silver linings have you discovered during these challenging times? For many, it’s spending more time with family. For some it has been time in person, as outside social opportunities are limited. For others, it has been more intentional visits with family by Zoom when they cannot gather in person.
As we think of our families, our thoughts may also turn to estate planning and how we intend to provide for our families when we are gone. While the concept of stewardship of our assets may start with considering how to pass wealth on to our families, it need not end there. Many of us believe that stewardship also entails providing for our communities — whether they be geographic, faith, learning, arts, social welfare or other forms of community.
There are so many wonderful ways to provide for your community in the estate planning context. An obvious option is to direct in your will or trust that a certain amount or percentage of your estate pass to favorite charitable organizations upon your death. Just be sure that your attorney understands how to properly specify that these gifts are funded with taxable retirement plans, so there is less tax for your family to pay when you are gone.
There are other options that may be less familiar, but which can provide you with lifetime benefits and a current income tax deduction. These are referred to as “planned giving” vehicles. A charitable gift annuity set up through a charitable organization provides you with a lifetime stream of income much higher than you would receive from savings accounts. A charitable remainder trust provides you with a lifetime stream of income and can be used to avoid or at least defer capital gains taxes on the sale of low-basis assets. A gift of a remainder interest in a home or other real estate provides you with an immediate charitable deduction, while allowing you to remain in the home for the rest of your life.
A skilled estate planning attorney should be able to discuss these and other death-related and lifetime charitable planned giving options with you and incorporate them into your estate plan. Just be clear with your attorney that you see the “objects of your bounty” as your family and your community!
This information is brought to you by Melissa H. De Vries, a partner at Hoogendoorn & Talbot LLP, in partnership with Oak Park-River Forest Community Foundation.
Melissa De Vries’ practice focuses on estate planning, estate administration, special needs planning, elder law, tax planning and preparation, charitable planning and advising charitable organizations. Learn more about her at https://www.htlaw.com/
For over sixty years, generations of thoughtful and caring donors and residents have empowered the Oak Park-River Forest Community Foundation’s work to safeguard and advance the community in which we live, raise our families and work. Learn how the Community Foundation assists donors plan their giving at www.oprfcf.org/library