Leaving a Meaningful Financial Legacy

Many of us want to do our part to leave the world a better place. Below are five different ways you can leave a financial legacy.

1. Give gifts in your lifetime.
If you have the financial  freedom to do so, making financial gifts while you are still alive is a great way to leave a legacy. Money you donate to qualified charitable organizations can be  deducted from your taxes, saving you money while also helping you support a good cause. If you want to leave a family legacy, consider giving
gifts to loved ones while you are living, like helping pay for your grandchild’s college education. Just make sure you’re aware of annual limits on what you can give to individuals without triggering gift tax ($15,000 per person in 2021).

2. Make a bequest in a will.
Many people use their will to make philanthropic bequests, leaving funds to their favorite charity, alma mater, or church. For people who have money to give, recognizing an organization in their will is a relatively easy way to leave a legacy. Bequests in a will don’t require any additional
planning and are exempt from estate tax, provided the recipient is a qualified charitable organization. However, if you plan to make a substantial bequest to a charity, you may want to inform them of your plans in advance. This is particularly important if you plan to donate physical property, like real estate or artwork, as not all charities will want or be able to accept such donations, or if you plan to place restrictions on how the gift is used.

3. Create a charitable remainder trust.
If you would like to make a substantial gift to a charity but also want to provide for your heirs
or continue to receive income during your lifetime, a charitable remainder trust (CRT) may be an option. Here’s how it works: You transfer

consider giving gifts to loved ones while you are living

property to the trust (and get a tax deduction at the time of the transfer), and you or your heirs receive income from the trust for a specified period of time. Then, when that period ends, the remaining assets go to the charity of your choice.

A word of caution: CRTs are irrevocable, which means once you’ve made this decision, you can’t reverse it.

4. Set up a donor-advised fund.

Know that you want to leave money to a charity, but not ready to hand it over just yet? Consider setting up a donor-advised fund. A donoradvised
fund allows you to make contributions to a fund that is earmarked for charity and claim the associated tax deduction in the year you contribute the funds. You continue to make more contributions to the fund, which are invested and grow free of tax. Then, when you are ready, you can choose a charity to receive all or some of the accumulated assets. It’s a great way to earmark funds for charity now while also accumulating a more substantial amount of money to leave as a legacy.

5. Fund a scholarship.
Endowing a scholarship is a great way to make a difference in the life of a talented student. Here’s how it typically works: You give a certain amount of money to the school of your choice,

which earmarks it to fund scholarships, often for certain types of students (e.g., female math majors, former foster children, or people suffering from a certain disease). Other scholarships are established through community foundations. A seed gift of $25,000 or $50,000 may be enough to get started. Be aware, however, that while you may be able to have a say in selection criteria for the scholarship, there’s a good chance you won’t be able to select the recipient yourself. If you want to do that, you’ll need to distribute the money in another way, perhaps by setting up your own nonprofit organization.

6. Start a foundation.
Starting a family foundation is appealing to
many, especially those who like the idea of having greater control over how their money is used as well as the prestige that comes with running a foundation. Well-managed private foundations can also endure for many generations after you’re gone. But you’ll need substantial assets to make setting up a foundation worth it. Plus, foundations are complicated and expensive to set up and
administer. But, if you are committed to the idea of giving back, and especially if you want to keep the entire family involved in giving (a concern for many wealthy families), a private foundation could be the way to go.

Curious about steps you can take to leave a meaningful legacy? Please call to discuss this topic in more detail.

Frankly Speaking

“You don’t buy life insurance because you are going to die, but because those you love are going to live.” – Anonymous

Since mid-February, the average retail investor has underperformed the S&P 500 by 11%.- Investopedia Sunday, March 26, 2021

“We could say that the government spends money like drunken sailors, but that would be unfair to drunken sailors.” -Ronald Reagan

OK, nobody wants to talk about Life Insurance or Estate Planning BUT…what will happen to your family when you’re gone? And we will ALL go someday. Yet there is no reason they should be left in a lurch, unable to stay in their home or finish the kid’s education. This last year should have made you seriously realize Life Insurance is for THEIR sake as are a Will and related documents. Still need help? PLEASE ask me about additional coverage and for guidance on Estate Planning FREE OF CHARGE! What have you got to lose besides sleepless nights worrying?

If you would like more information or to discuss your financial concerns