Estate planning allows you to decide how your assets will be distributed, provide for the people who matter to you, and support organizations or causes that have played an important role in your life.

For individuals who want charitable giving to be part of those plans, there are several ways to incorporate a gift to a church, school, foundation, nonprofit organization, or other charitable organization into an estate plan.

Henderson Franklin’s Trusts & Estates attorneys help individuals and families throughout Southwest Florida evaluate charitable giving and planned giving strategies as part of their overall estate plans. The right approach depends on your goals, family circumstances, assets, existing estate planning documents, and potential tax considerations.

What Is Planned Giving?

Planned giving generally refers to charitable gifts that are coordinated with an individual’s financial, tax, or estate planning objectives. For instance, consider an individual who has been deeply involved with a local animal shelter throughout their life. As part of their estate plan, they might arrange for a portion of their estate to be left to the shelter through a bequest in their will. This ensures that, upon their passing, their support continues to benefit the shelter’s mission. While some charitable gifts are made during a person’s lifetime, others are structured to take effect in the future or as part of the individual’s estate.

For example, you may want to leave a gift to an organization through your will or trust, designate a charity as a beneficiary of an account, or consider another charitable giving strategy as part of your estate and tax planning.

The goal is to structure your charitable intentions so they work together with the rest of your estate plan.

Ways to Include Charitable Giving in Your Estate Plan

Depending on your goals and circumstances, there are several ways charitable giving may be incorporated into an estate plan, including:

• Making a charitable gift through a will;
• Providing for a charity through a revocable or irrevocable trust;
• Naming a charitable organization as a beneficiary of certain financial or retirement accounts;
• Making gifts of appreciated assets;
• Incorporating life insurance into charitable planning;
• Establishing certain charitable trusts; and
• Coordinating charitable gifts with estate and gift tax planning.

Each approach carries distinct legal, financial, and tax considerations, as well as potential pitfalls. For instance, without careful planning, certain gifts could inadvertently disadvantage other beneficiaries or result in unforeseen tax liabilities. Before making a significant planned gift, it is important to assess how the gift may impact other beneficiaries, whether it could lead to disputes or legal challenges, and how it aligns with your complete estate plan.

Leaving a Charitable Gift Through Your Will or Trust

One way to support an organization after your death is to include a charitable gift in your will or trust. Depending on your intentions, your estate planning documents may provide for:

• A specific dollar amount;
• A particular asset;
• A percentage of your estate or trust; or
• A gift from the assets remaining after other distributions have been made.

Careful drafting is important, as unclear or ambiguous language in your estate planning documents may result in confusion, disputes, or even the failure to carry out your intended charitable gift. Your documents should accurately identify the organization you intend to support and clearly state how to distribute the gift.

Your attorney can also help you consider what should happen if the organization changes its name, merges with another organization or no longer exists when the gift is eventually distributed.

Naming a Charity as a Beneficiary

Certain assets pass according to beneficiary designations rather than through the terms of a will. Depending on the asset type and your circumstances, naming a charitable organization as a beneficiary may offer another way to accomplish your charitable goals.

This can potentially include certain retirement accounts, life insurance policies, and other assets that permit beneficiary designations.

Beneficiary designations should be reviewed as part of your overall estate plan. Because these designations can control how particular assets are distributed, an outdated beneficiary designation may produce a result that differs from the plan reflected in your will or trust.

Providing for Family and Supporting Charitable Organizations

Including charitable giving in an estate plan does not necessarily mean excluding family members or other beneficiaries.

An estate plan can address multiple priorities. For example, you might provide for your spouse, children or other beneficiaries while also leaving a specific amount or percentage of your estate to an organization you want to support.

The appropriate balance is personal and will vary from one family to another. Reviewing the entire estate plan can help determine how a proposed charitable gift may affect other distributions and whether the plan reflects your priorities.

Planning a Gift to a Church, School or Nonprofit Organization

Churches, schools, community organizations, foundations and other nonprofits often depend on charitable support to continue their work. For individuals with a longstanding connection to an organization, including that organization in an estate plan can be one way to continue that support in the future.

Before including an organization in your estate planning documents, consider:

• Which organization you want to support;
• Whether your gift should be a specific amount, percentage or asset;
• Whether you want the organization to use the gift for a particular purpose;
• Whether restrictions placed on the gift could affect the organization’s ability to use it;
• How the gift fits with the distributions you intend to make to family members and other beneficiaries; and,
• Whether your charitable plans should be coordinated with your financial and tax planning.

If you intend to restrict how a charitable gift may be used, careful planning and drafting can be particularly important.

Charitable Giving and Tax Considerations

Charitable giving may have income, estate and gift tax implications depending on the type of asset, timing and structure of the gift, the recipient organization, and your individual circumstances.

Certain assets may also present different tax considerations when transferred to a charitable organization rather than to an individual beneficiary.

Because tax laws and financial circumstances change, tax considerations should be evaluated based on your particular situation. An estate planning attorney typically focuses on the legal aspects of your estate, while your accountant provides guidance regarding tax implications, and your financial advisor assists with the management and allocation of your assets.

Effective tax planning for charitable giving often requires collaboration among these professionals, who together can analyze the potential impact of various giving strategies, optimize the structure and timing of gifts to minimize tax liabilities, and help ensure that your charitable and family objectives are achieved in accordance with your overall estate and financial plan.

Questions to Consider Before Making a Planned Gift

Although it is not necessary to finalize the specific structure of your charitable gift before consulting with an estate planning attorney, you may find it helpful to reflect on certain questions in advance of your meeting:

• Which organizations or causes are important to you?
• Do you want to make gifts during your lifetime, through your estate or both?
• Would you prefer to leave a specific amount, a particular asset or a percentage of your estate?
• Do you want your gift used for a specific purpose?
• Have you already included charitable organizations in your will or trust?
• Have you named any charities as beneficiaries of accounts or insurance policies?
• How do you want to balance charitable giving with gifts to family members and other beneficiaries?
• When did you last review your estate planning documents and beneficiary designations?

These questions can provide a starting point for a conversation with your attorney about your options.

Preparing for Your Estate Planning Meeting

If you are creating an estate plan or reviewing an existing one, gathering some basic information in advance can help you prepare for your meeting.

Our complimentary checklist provides a comprehensive overview of the types of documents, financial accounts, and pertinent information that may be relevant to bring when preparing for a meeting with an estate planning attorney.

DOWNLOAD THE ESTATE PLANNING CHECKLIST

Frequently Asked Questions About Charitable Giving and Estate Planning in Florida

Can I leave money to a charity in my Florida will?

Yes. A will can include a provision leaving a gift to a qualifying charitable organization. The gift might consist of a specific amount, particular property, a percentage of the estate or a portion of the estate remaining after other distributions. The appropriate language will depend on what you want to accomplish and how the rest of your estate plan is structured.

Can I leave part of my estate to charity and the rest to my family?

Yes. An estate plan can provide for both individual beneficiaries and charitable organizations. How those gifts should be structured depends on your assets, family circumstances and goals. It is important to consider the charitable gift in the context of the complete estate plan.

Can I leave money to my church through my estate plan?

A church or other religious organization can generally be included as a beneficiary in an estate plan. Your estate planning documents should clearly identify the intended organization and describe the gift. If you want the church to use the funds for a particular ministry, program or purpose, discuss those intentions with your attorney so the appropriate language can be considered.

Can I name a nonprofit organization as a beneficiary of my trust?

A trust may provide for distributions to charitable organizations as well as individual beneficiaries. The appropriate provisions depend on the type of trust, the intended gift and the other terms of the estate plan.

Can I name a charity as a beneficiary of an account?

Some financial accounts, retirement accounts and insurance policies allow the owner to name beneficiaries. Depending on the asset and your circumstances, you may name a charitable organization as a beneficiary. Because beneficiary designations can have legal and tax consequences, they should be coordinated with your overall estate plan.

What is the difference between charitable giving and planned giving?

Charitable giving is a broad term that can include donations made at any time. Planned giving typically involves a charitable gift coordinated with a person’s estate or financial planning and may include gifts that take effect in the future. Planned giving can involve wills, trusts, beneficiary designations and other strategies depending on the individual’s goals.

Should I update my estate plan if I decide to make a charitable gift?

If your charitable intentions have changed since you prepared your estate plan, it is a good time to review your documents and beneficiary designations. An estate planning attorney can determine what changes may be necessary to reflect your current wishes accurately.

Talk With a Southwest Florida Estate Planning Attorney About Charitable Giving

If incorporating charitable giving into your estate plan aligns with your goals, the next step is to schedule a consultation with Henderson Franklin’s Trusts & Estates attorneys. During this meeting, the attorneys will evaluate your specific objectives, review your assets and existing planning documents, and assist you in developing a comprehensive strategy that integrates your charitable intentions with the rest of your estate plan.

Our attorneys advise individuals and families in Fort Myers, Naples, Bonita Springs, Cape Coral and throughout Southwest Florida on estate planning, wills and trusts, charitable gift planning, estate and gift tax planning and related matters.

To discuss your estate planning and charitable giving goals, contact Henderson Franklin at info@henlaw.com to request an appointment.