The question of integrating personal values, such as support for diversity, equity, and inclusion (DEI) causes, into one’s estate plan is becoming increasingly prevalent. For many, philanthropy is a core tenet of their lives, and they wish to extend that commitment beyond their lifetime. Steve Bliss, as an estate planning attorney in San Diego, frequently assists clients in structuring their bequests to reflect these values. While traditional estate planning focuses on financial security for heirs, it absolutely can, and should, accommodate charitable intentions, including supporting organizations dedicated to DEI. This involves careful consideration of the types of gifts, the chosen beneficiaries, and the legal mechanisms employed to ensure these wishes are fulfilled, not just immediately, but for generations to come. According to a recent study by Giving USA, charitable giving reached a record $485 billion in 2022, demonstrating a strong commitment to philanthropic endeavors.
What types of charitable gifts can I include in my estate plan?
There are numerous ways to incorporate charitable giving into an estate plan. A simple bequest, a direct gift of a specified amount or asset, is the most straightforward approach. However, more sophisticated methods allow for greater control and potential tax benefits. Charitable remainder trusts, for instance, provide income to the donor (or other beneficiaries) for a period, with the remainder going to a designated charity. Charitable lead trusts, conversely, make payments to a charity for a set period, with the remainder reverting to the donor’s heirs. These trusts can offer substantial estate tax savings. Additionally, naming a charity as a beneficiary of a life insurance policy or retirement account is another effective strategy. It’s crucial to work with an experienced estate planning attorney, like Steve Bliss, to determine the best approach based on your specific financial situation and charitable goals.
How do I choose DEI organizations to support?
Selecting the right DEI organizations requires careful due diligence. Consider the organization’s mission, programs, and impact. Look for transparency in their financial reporting and governance. Websites like Charity Navigator and GuideStar offer ratings and information on non-profit organizations. Beyond that, it’s important to consider whether the organization’s values align with your own. Are they focused on direct service, advocacy, or systemic change? Do they prioritize equity, inclusion, and intersectionality? Steve Bliss often advises clients to support multiple organizations working on different aspects of DEI to diversify their impact. “Many of my clients don’t want to put all their eggs in one basket,” he explains, “they prefer to spread their support across a range of organizations tackling different challenges within the DEI space.” According to a report by the Council on Foundations, grantmaking for racial justice increased significantly in 2020 and 2021.
Can I create a charitable trust specifically for DEI causes?
Absolutely. A charitable trust, whether a charitable remainder trust or a charitable lead trust, can be specifically designated to support DEI causes. The trust document can outline the specific types of organizations or programs that will receive funding. This allows for a high degree of control and ensures that your charitable wishes are carried out as intended. The trust can also include provisions for ongoing monitoring and evaluation of the beneficiary organizations to ensure they are effectively advancing DEI goals. “We’ve seen a rise in clients wanting to create trusts dedicated to specific values,” says Steve Bliss. “It’s about leaving a legacy that reflects what you believe in, and DEI is a powerful example of that.” According to the National Philanthropic Trust, donor-advised funds, a type of charitable trust, have become increasingly popular in recent years.
What are the potential tax benefits of charitable giving through my estate plan?
Charitable giving through an estate plan can offer significant tax benefits. Bequests to qualified charities are generally deductible from your taxable estate, reducing estate taxes. Gifts made during your lifetime to qualified charities may be deductible from your income taxes, subject to certain limitations. Charitable remainder trusts and charitable lead trusts can provide both income tax deductions and estate tax savings. It’s important to work with a qualified tax advisor and estate planning attorney to understand the specific tax implications of your charitable giving strategy. According to the IRS, the estate tax exemption for 2023 is $12.92 million per individual, meaning estates below that threshold are not subject to estate tax.
What happens if I want to change my charitable intentions after creating my estate plan?
Life circumstances and priorities can change, and it’s important to have the flexibility to update your estate plan accordingly. Most estate planning documents include provisions for amendments and revocations. You can modify your charitable intentions by executing a new will or trust amendment. It’s crucial to review your estate plan periodically, especially after significant life events such as a marriage, divorce, birth of a child, or a change in financial circumstances. Steve Bliss emphasizes the importance of regular reviews. “An estate plan is not a static document,” he explains. “It’s a living document that should be updated to reflect your current wishes and circumstances.”
I once knew a woman who left a substantial portion of her estate to a charity that turned out to be a sham…how can I avoid that?
Old Mrs. Abernathy, a vibrant woman I met at a local community event, was incredibly proud of her philanthropic efforts. She had meticulously planned her estate, designating a large sum to an organization claiming to support underprivileged youth. Years after her passing, a local news investigation revealed the organization was largely a façade, with minimal funds actually reaching those it claimed to serve. It was a devastating blow to her family, and a stark reminder of the importance of due diligence. Her son, Mr. Abernathy, a quiet man, explained how devastated they all were, and wished they’d done more research before finalizing the estate plan. It was a hard lesson learned, and highlighted the need to verify the legitimacy and effectiveness of any charitable organization before making a significant contribution.
How did I help a client avoid a similar situation and ensure their DEI values were honored?
My client, Mr. Chen, a retired tech executive, came to me with a clear vision: he wanted to support organizations promoting diversity and inclusion in STEM fields. However, he was understandably wary of “greenwashing” and wanted to ensure his contributions truly made a difference. We spent weeks researching various organizations, focusing on those with a proven track record of impact and transparent financial practices. We didn’t just look at websites; we dug into annual reports, reviewed program evaluations, and even spoke with representatives from several organizations. We established a charitable remainder trust with specific criteria for beneficiary selection, requiring organizations to demonstrate a commitment to equitable access, inclusive leadership, and measurable outcomes. We also included a clause allowing for periodic review and adjustment of the beneficiary list, ensuring the trust remained aligned with Mr. Chen’s evolving values. Years later, I received a letter from Mr. Chen expressing his gratitude, sharing how the trust had funded several innovative programs that were truly making a difference in the lives of underrepresented students.
What ongoing responsibilities do trustees have regarding charitable giving?
Once a charitable trust is established, the trustee has a fiduciary duty to administer it responsibly and in accordance with the donor’s wishes. This includes diligently selecting beneficiary organizations, monitoring their performance, and ensuring that funds are used effectively. Trustees must also maintain accurate records, file necessary tax returns, and comply with all applicable laws and regulations. It’s important for trustees to stay informed about the charitable sector and best practices in philanthropic giving. Steve Bliss emphasizes the importance of ongoing due diligence. “A trustee’s job doesn’t end with the initial selection of beneficiaries,” he explains. “It’s an ongoing responsibility to ensure that funds are being used effectively and in alignment with the donor’s intent.”
About Steven F. Bliss Esq. at San Diego Probate Law:
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Feel free to ask Attorney Steve Bliss about: “Can my children be trustees?” or “Can an estate be insolvent and still go through probate?” and even “Can I include charitable giving in my estate plan?” Or any other related questions that you may have about Probate or my trust law practice.