Some people in New York who are creating an estate plan may want to incorporate philanthropic planning into their estate plan. This can be beneficial to families, can be a good tool for wealth management and can also be a way for a person to create a legacy.
First, people should consider what causes they want to support. People who are uncertain might think about what charities they already contribute to, what issues they are worried about and how they want to be remembered. The choice should be rooted in a person’s values.
After that, it is necessary to decide what assets to donate. This may be cash or it could be other assets ranging from artwork to real estate and more. The assets that are donated could be dictated by what the organization is set up to accept. Some smaller ones may only be able to take cash. A consideration that goes along with this is how the assets will be donated. Using a will to make charitable gifts may mean an estate does not get as many benefits from the donation as would be the case for other methods. Private foundations and certain types of charitable trusts are commonly used vehicles. People may also want to discuss their plans for charitable giving with family members.
An attorney may be able to assist a person in setting up a charitable trust as well as other types of trusts. For example, the person may not want younger heirs to receive an inheritance all at once, so a trust could be created that makes distributions when the person reaches certain ages. There might be other strategies, such as gifting, available for reducing estate tax if necessary. People may also want to create powers of attorney and other documents that address what happens if they become incapacitated.