Many people make charitable gifts throughout their lifetimes. Those who belong to religious communities might make regular contributions to their congregation. People also frequently choose to support charitable organizations and nonprofits that operate in areas they find important.
Some people donate to domestic violence shelters, while others support environmental causes or animal rights charities. It is possible to continue that personal legacy of generosity and support even after death. Many people integrate charitable giving into their estate plans.
There are many ways to provide financial support for charitable causes posthumously. The three tactics below are among the most common and effective.
Adding a charity as a beneficiary
Individuals who rely primarily on wills for their estate planning needs can include specific nonprofit, religious or charitable organizations as beneficiaries in their documents. Doing so allows an individual to set aside a specific amount of their personal wealth to support a cause or organization that has been important to them and represents a value or purpose that they find meaningful. Of course, there are limitations to using a will as a testamentary instrument, including the possibility of other parties contesting the will in probate court. The assets earmarked for charity could also be at risk of liquidation if the estate is insolvent.
Establishing a charitable trust
Those hoping to provide recurring support, possibly because they hope to fund a scholarship, may need to think about managing charitable contributions over many years. Funding a charitable trust and providing instructions for distributions to one or more qualified organizations can be a way to achieve this goal. The trustee can help manage assets and make appropriate distributions to charitable causes. For those with significant resources or worried about controversy, a trust may be a better option than a will for making ongoing charitable contributions.
Leaving personal property for a cause
Not everyone has enough personal property to make significant financial contributions to meaningful causes. However, they may have personal property that could benefit others. People hoping to provide support for a homeless shelter or domestic violence organization might donate their clothing or housewares directly to a charitable cause. Items that their family members may not necessarily want to keep for themselves could have a major positive impact on others going through hardship. Testators might also leave instructions for their loved ones to sell some of their personal property and then donate the proceeds from the sale to a charitable organization.
Looking at different ways to leave a positive impact can help people establish a thorough and effective estate plan. Charitable giving can be an important component of an individual’s final legacy.