Charitable Giving and Wealth Transfer

Estate planning is a vital component of lifetime financial planning

Many people leave what could be the biggest financial questions of their lifetime unanswered:

  • Who will receive my estate?
  • Will I owe estate taxes?
  • How much will I owe?
  • Where will the money come from when the tax is due?

Proper estate planning can help ensure financial security for you and your family during your lifetime, and after your death. It also ensures your estate is passed on—intact—to your heirs according to your wishes.

What happens without an estate plan?

  • State law will determine who inherits your assets, which could mean they pass to distant relatives or to children who lack the maturity to properly care for them.
  • The court appoints administrators who may not necessarily have ideas that are compatible with your own.
  • You may pay unnecessary taxes and expenses.
  • The court appoints a guardian for your children.
  • Your family could be forced to sell your assets—at less than market value—to pay the estate taxes you owe.

To whom do you want to leave your money—the attorneys who settle your estate and Uncle Sam, or your family? The choice is yours.

Estate taxes are costly, and are generally due and payable within nine months. Protecting your estate will not only help pay the taxes, but also ensures your estate is distributed according to your wishes.

Preserve and transfer your estate

The four most common ways of preserving and transferring your estate to your heirs are wills, trusts, charitable gifts, and life insurance.
  • Wills
    A will is a legal declaration of how you want your assets to be distributed when you die. Under a will, you specify:
    • Who is to receive your assets
    • Who will be legal guardian for your children
    • Who will manage and administer your estate
    • The direction of any assets into trusts, charities, schools, or other accounts or organizations

    Everyone should have a will and review it periodically. However, to accomplish other financial goals, such as reducing taxes, you should also consider using trusts.

  • Trusts
    A trust allows you to “custom-tailor” the transfer of property to your beneficiaries according to your specific wishes. There are various types of trusts, each designed to help you achieve very specific goals—from passing assets to heirs to keeping insurance proceeds out of your estate.
  • Charitable gifts
    Charitable gifting allows you to distribute a portion of your assets to selected organizations—when and in whatever amounts you designate—thus reducing the amount of taxes you owe. Charitable gifting has the added bonus of:
    • Reducing estate tax liability
    • Sheltering assets from creditors
    • Increasing privacy in transferring assets
    • Providing income to a spouse, children, or individual with special needs
    • Rewarding a favorite charity
  • Life insurance
    Life insurance can provide the cash your family needs to maintain their lifestyle, pay settlement costs, and pay estate taxes and costs. It can also help pay college expenses and mortgages, supplement retirement income for a spouse, replace the value of a charitable gift, and equalize inheritances among your heirs.

Begin estate planning today

There’s no guarantee you’ll have time to plan your estate down the road, and it’s never too early to get a plan in place.

Find out about managing an inheritance.

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