August is National Make-A-Will Month. This means your clients may be reading articles and hearing about estate planning more this month than usual, which makes the next few weeks an especially good time to prompt your clients to review their estate plans and get their wills and trusts in order.

Charitable giving is an important part of any estate planning conversation. Bold, legacy-making plans are frequently in the news because of the high-profile people who establish them. Your clients may not realize that nearly anyone can leave a legacy to support their favorite charitable causes.

By discussing what legacy charitable gifts are and how they work will help your client determine what assets to consider. You will then have a clearer direction for formalizing the client’s plan with the proper legal and financial documentation. This clearly defined process helps your client feel confident that their charitable intentions will be realized when that legacy gift is actually made—and give your client the peace of mind of knowing it will actually get done.

Charitable giving intentions and the possibility of establishing legacy gifts should be a routine and standard topic of any financial or estate planning discussion, along with provisions in an estate plan for family and loved ones.

Here’s a primer to help you simplify key principles as you convey to your clients what they need to know about leaving a legacy:

Q: What is a legacy gift to a charity?
A: Encourage your clients to think of leaving a charitable legacy as a post-life gift that the client structures in advance of their passing. Legacy gifts are often referred to as a type of planned gift. 

Q: What assets can be used to make a legacy gift?
A: Like the gifts to charity that your clients are already making during their lifetime, cash, stock (especially highly appreciated stock), real estate, life insurance, an IRA beneficiary designation (which is extremely tax effective), are examples of assets that can be the subject of a legacy gift. A legacy gift can be expressed in estate planning documents as a dollar amount, percentage of the whole, or a legacy gift of the assets themselves. Talking with a financial advisor and the staff at the Community Foundation can be helpful in this process.

Q: How is a legacy gift made?
A: Legacy gifts are typically spelled out in detail in a will or trust document. Having clearly written estate documents will help to avoid their intentions being left to hearsay or conflict. To attorneys, accountants, and financial advisors, this is common sense. But we would encourage you to not overestimate your clients’ understanding of how estate plans work. In spite of the many benefits associated with a clearly defined estate plan, 2 out of 3 Americans have no estate planning documents.

Q: How can a discussion about legacy gifts help motivate clients?
A: Estate planning can be an uncomfortable topic because, by definition, it requires a conversation about mortality. This is likely part of the reason that 40% of Americans say they won’t even consider putting a will in place unless or until their life is in danger. But many people think charitable giving is a much more pleasant topic than discussing the end of their own lives. That’s why legacy giving is a topic that can help pave the way for the broader, essential conversation about overall estate planning.

Q: What are some particulars to be aware of?
A: Most legacy gifts can be revoked or altered through beneficiary or will changes while the client is alive. This is an important feature to mention to clients who want to include charitable giving in their estate plans but like the idea of flexibility as the overall family and financial picture changes over the years. By making plans through the Community Foundation, these amendments to their beneficiary designations are made without accruing a fee.

Q: What tools does CFAAC offer you?
A: A particularly useful technique is for a client to meet with our staff to establish a Legacy Fund at the Community Foundation. This agreement would capture their intent for charitable distributions to specific organizations upon their passing. Your client’s estate planning documents can, in turn, simply name the fund as the beneficiary of charitable bequests. The client may then adjust the terms of the fund anytime during their lifetime to reflect evolving charitable priorities. More information, including sample language for bequests, can be found in CFAAC’s Estate Planning Guide.

We look forward to working with you and your charitable clients as they firm up their legacy giving plans, whether in August or anytime of year. For more information you can contact John Rodenhausen, Director of Gift Planning, at John@CFAAC.org or 410.280-1102 Ext. 103.