By Patricia Fong, JD, CTFA, CAP®

 

SUMMARY: 

A giving legacy can help fulfill your philanthropic goals.

 

OUR PERSPECTIVE:

Many of us think that only people like Warren Buffet or Bill Gates can establish a foundation or use charitable vehicles to support their favorite charities. You don’t need millions of dollars though to be a philanthropist.

Recently, I met a group of women who were members of a local church, a recipient of funds helping to support it over the last 25 years. This plan started out with five sisters, who never married, nor had children, and all lived together. They were frugal, saving money and incurring no debt. One by one, they passed away. By the time I met with the remaining three sisters, one was nearing the end of her life and said to me, “Please watch over my sisters.” With that direction, I helped the last two sisters with their financial and estate goals using a few different tools. They were intent on leaving any remaining assets after they died to a family foundation that was created under the terms of their trust. The income in perpetuity was to be split 50% to their church and 50% to a charity they were passionate about. The trust started out with roughly $1 million, has since more than doubled, and continues to pay out the net 5% income distribution to the church and charity in the amount of about $50,000 each. The group of women I met were amazed that their church continues to receive support like this allowing their church to survive.

If you’re considering legacy planning, ask yourself these questions to get started:

  1. What are my values and goals?
  2. Do I have enough to take care of myself and my loved ones?
  3. Do I want to create a legacy that includes my family’s values?
  4. What charitable organizations am I passionate about or have supported over the years?
  5. Can I use philanthropy and gifting to help my financial situation?
  6. Should I use charitable giving tools (e.g., donor advised fund, charitable remainder trust, family foundation) for tax benefits?

Once you gather your ideas and interests in philanthropy, share your thoughts with an experienced Trust Officer or CERTIFIED FINANCIAL PLANNER™ professional to help incorporate your goals and vision into your wealth plan.