Leaving a Lasting Impact: Three Simple Ways to Make a Legacy Gift to Charity

I want to leave my little corner of the world a little better because I was here. I think most of us want the same thing. We are all looking for ways to make a mark on the people and places that mean the most to us. 

One easy way to achieve this goal is by making a legacy gift to charity. These gifts, carefully planned and executed, can create a lasting impact on the causes and the organizations that we hold in high regard. 

Here are three easy ways to make a legacy gift to charity:

1. Beneficiary Designation

One of the simplest – and most tax-efficient – ways to leave a legacy gift is through a beneficiary designation. This option involves simply naming your favorite charity as a beneficiary of assets such as retirement accounts, life insurance policies, or investment accounts.

How It Works:

• Contact the financial institution managing your accounts and request a beneficiary designation form.
• Specify the percentage or specific amount you wish to allocate to the charity.
• Update the form as needed to reflect any changes in your preferences or circumstances.

Benefits:

• Ease of Setup: Beneficiary designations are relatively straightforward to arrange and require minimal paperwork.
• Avoidance of Probate: Assets designated to a charity bypass probate, ensuring a smoother transfer and potentially reducing estate taxes.
• Flexibility: You retain control over your assets during your lifetime and can adjust your beneficiary designations as necessary.

2. Bequest

A bequest is a gift outlined in your will or living trust, specifying how your assets should be distributed upon your death.  By including your favorite charity in your estate plan, you can continue to support the organizations and causes you care about even after you’re gone.

How It Works:

• Consult with an attorney to draft or update your will, including provisions for charitable bequests.
• Clearly outline the type and amount of assets you wish to leave to the charity.
• Review and update your will periodically to reflect any changes in your intentions or circumstances.

Benefits:

• Tailored Giving: Bequests allow you to customize your charitable giving to align with your values and priorities.
• Preservation of Assets: You retain full control and use of your assets during your lifetime, knowing they will support your favorite charity only after you no longer need the assets.
• Potential Tax Benefits: Charitable bequests may reduce estate taxes, allowing more of your assets to support charitable causes.

3. Donor Advised Fund

A Donor Advised Fund is a charitable giving account that allows you to make a contribution to a fund, receive an immediate tax deduction, and recommend grants to charities over time. It provides flexibility and strategic planning for your charitable interests.

How It Works:

• Establish a Donor Advised Fund through a sponsoring organization, like the Community Foundation of Greater Huntsville.
• Make an initial contribution of cash, securities, or other assets to the fund.
• Recommend grants to eligible charities from your DAF, specifying the amount and timing of distributions.
• Name your favorite charity as the recipient of any funds that are left in your Donor Advised Fund upon the death of your fund advisors.

Benefits:

• Tax Efficiency: Contributions to a Donor Advised Fund may qualify for an immediate tax deduction, while growth within the fund is tax-free.
• Simplified Giving: Donor Advised Funds streamline charitable giving by consolidating contributions and grant recommendations into one account.
• Family Involvement: Donor Advised Funds offer the opportunity to involve your family members in your charitable giving during your lifetime.

Making a legacy gift to charity doesn’t have to be complicated or overwhelming. Whether through beneficiary designations, bequests, or Donor Advised Funds, there are accessible and effective ways to leave a lasting legacy on the causes and the organizations that are most important to you.

By planning ahead and leveraging these simple strategies, you can create a legacy of generosity that will continue long after you are gone.  Now, that’s a legacy that lasts.