As you contemplate your estate plan, you may wonder whether there is a way to invest in the future or to help others live the kind of life you enjoyed. In estate planning, we call these types of devises legacy gifts. At the Cleveland estate planning firm of James Bart Leonardi, LLC, we know that leaving your legacy is an important part of estate planning, but we also understand that legacies are not right for everyone. Read more to find out if legacy gifts are right for you.
A legacy gift is a way to make your impact on the world even after you have left it, usually by giving to charity in your name or in your honor. You may decide to give to a specific charity or nonprofit entity, or you can gift your money to a specific charitable purpose such as curing cancer or, even more broadly, medical research and advancement. Many organizations depend on legacies to survive; in fact, some of them provide sample language or suggestions on how to achieve your legacy gift.
A legacy gift can be made during or after your lifetime. It can be a simple gift of money, a trust that pays out only interest, savings bonds, or appreciated stock. You may even be able to assign all or a portion of your life insurance proceeds to a charity, or charitable purpose through a charitable trust.
There are a few reasons you may want to make a legacy gift. You may desire to do so for moral or ethical reasons—because it is the “right” thing to do; for religious reasons; or even for financial reasons. Legacy gifts, if done properly, can provide an important source of tax relief. You may feel indebted to a certain organization for your success in life and want to give back to that organization so it can continue to impact others in the future. You may even be motivated by notoriety. For example, you might want to create the “John Smith” Scholarship Fund, or you may want the new building at your alma mater to be the Smith Center for Political Science. (The naming rights, of course, would be subject to agreement by your alma mater.)
In addition to knowing that you have made an investment in the future, given back to an organization that has had a strong influence in your life, or saved thousands of dollars in taxes, one important benefit of legacy gifts is that you can make your money last forever.
If you decide to make a legacy gift in the form of a trust, you can make your gift last virtually forever because trusts for charitable purposes have special rules. Normally, a trust’s life is limited to a certain duration (that is different for each trust), but a charitable trust can last forever. If you set up a trust to pay out only income, your principal will never be invaded, and you can provide interest payments to your chosen charity (or charitable purpose) forever.
We Can Help You
Whatever your motivation for making a legacy gift, the Cleveland estate planning and probate law firm of Bart Leonardi, LLC, is here to help. For more information on choosing which kind of legacy gift is best for you, arrange a consultation with Cleveland estate planning attorney Bart Leonardi.