Today, we would like to discuss a financial planning strategy that one doesn't see through in their lifetime: using one's life savings for charitable benefit after they are gone.
Many of us make annual charitable donations, round up our grocery bills to help those in need, and donate time to make an impact in our local community. However, another avenue exists for those who cannot make donations now or want to continue to make an impact after they are gone, which entails leaving part or all of their estate to charities that matter most to them.
While we previously wrote about donor-advised funds, these are a donation avenue utilized during one's lifetime. Today, we want to discuss the importance of drafting your will so that you can direct your estate after you are gone to make a posthumous donation.
Simply put, a will is a legal document stating what should happen to your assets and dependents upon your death. Without preparing such a document, state courts and judges must adjudicate how your assets are dispersed, meaning that if you wanted to donate your home, car, or other assets to a charity, they might not receive them.
By crafting a will with an estate planning attorney, you can have relative certainty that your final wishes will be honored, generally for a reasonable cost.
For most people, drafting their last will and testament - the formal name for a will - is a simple process that only takes a few hours of their and an attorney's time. Once established, a will allows someone you trust to carry out your wishes after you are gone, giving them legal authority to sell your remaining assets and distribute them accordingly.
Every person has different wishes for what should happen after they are gone. Some want to pass on wealth to the next generation in their family, while others want to focus on making an impact elsewhere. Still, without a will, you cannot guarantee any of this. Therefore, we suggest thinking about how you want to be remembered and then contacting a local estate attorney in your area to craft such a document.
At Lundeen Abrams Advisors, we regularly work with our clients to help them plan past their lifetime to ensure their wishes are honored. Please call us today if you need a local estate planning attorney in the Minnetonka area. We would happily refer you to one of our trusted friends who practices estate planning law, as everyone needs someone they can trust.
We look forward to talking to you soon!