Charting Your Legacy: Incorporating Charitable Giving into Your Estate Plan

As a business owner, you have poured time, energy, and passion into building more than just a company — you have built a team, a reputation, and a legacy rooted in your values. Estate planning ensures that the wealth and purpose you created continue to make an impact long after you step away.

One of the most meaningful ways to extend that impact is through charitable giving. Whether your goal is to strengthen your community, support education, or champion a cause close to your heart, thoughtful planning allows you to create a legacy that reflects both your business success and your personal values. With the right strategy, the difference you make can last for generations.

Why Charitable Giving Matters

Charitable giving is about more than generosity — it is a powerful way to extend the impact of your wealth while supporting causes that matter to you. When thoughtfully integrated into your estate plan, charitable contributions can provide several benefits:

• Lower taxes. Contributions to qualified charities can reduce your taxable estate and, in many cases, provide immediate income tax deductions, helping preserve more of your wealth.

• Protect your assets. Structured giving can help manage capital gains or estate tax exposure, ensuring more of your assets go to the people and causes you care about most.

• Build your legacy. Support organizations that align with your mission, values, or industry to reinforce the principles behind your business and inspire future generations.

Incorporating charitable giving into your estate plan transforms your wealth into a lasting force for good — reflecting both your personal values and your business success.

Ways to Incorporate Charitable Giving

Philanthropy is not one-size-fits-all. The best approach depends on your goals, timeline, and overall estate plan. Here are some common strategies to consider:

1. Charitable Bequest

   Name a charity in your will or living trust to receive a specific amount, a percentage of your estate, or assets. This straightforward approach ensures your chosen organizations benefit directly from your legacy.

2. Donor-Advised Funds (DAFs)

   DAFs let you contribute to charity today, receive an immediate tax deduction, and recommend grants to organizations over time — even beyond your lifetime. This strategy offers flexibility, control, and easy administration.

3. Charitable Remainder Trusts (CRTs)

   With a CRT, you or your beneficiaries receive income for life or a set term, and the remainder goes to a charity you choose. CRTs can help minimize taxes on appreciated assets while providing consistent income.

4. Charitable Lead Trusts (CLTs)

   A CLT provides income to a charity for a set period, after which the remaining assets pass to your heirs — often with reduced estate or gift tax costs. This strategy lets you support the causes you care about while benefiting your family.

5. Retirement Accounts and Life Insurance

   Naming a charity as a beneficiary of your IRA, 401(k), or life insurance policy is a tax-efficient way to give. Because charities are tax-exempt, they can receive the full value of these assets without incurring income tax.

Align Giving with Your Business Legacy

Many business owners view their companies as extensions of their personal legacies. As you plan for succession or the sale of your business, charitable giving can play a meaningful role in that transition. Consider these approaches:

• Leverage business proceeds. After a sale, establish a donor-advised fund or private foundation to support causes that matter to you.

• Engage family and employees. Involve loved ones or key team members in philanthropic discussions to reinforce shared values and foster a culture of giving.

• Align giving with your mission. Direct charitable efforts toward initiatives that reflect your company’s purpose, such as workforce development, entrepreneurship, or local community programs.

Working with your CPA and estate planning attorney ensures your charitable giving strategy complements your broader financial plan — maximizing impact while maintaining tax efficiency and solidifying your legacy.

Building Your Personal Legacy

By weaving charitable giving into your estate planning, you can make a lasting difference that honors your success, supports your community, and reflects the principles that guided your business. In this way, your legacy becomes more than wealth; it becomes a meaningful story that continues to inspire long after you are gone.

Estate Planning Advisory Experts

With over 67 years of leadership, experience, and expertise, our talented team of CPAs and advisors understands the nuances of estate planning. In today’s ever-changing economic landscape, we provide resources that go beyond traditional audit, accounting, and tax services. We can help you develop a comprehensive estate plan that streamlines the process, minimizes tax liabilities, and ensures your assets are distributed according to your wishes. We will work with your attorney as they draft the legal documents required to implement a plan that best suits your needs—providing peace of mind for you and your loved ones across generations.

Here to Help You

Estate planning is not a one-time task but an ongoing process that should evolve with your business and personal life. If you have questions about your unique situation or need strategic financial advice, we are here to help you on this journey of charting your legacy. Contact us to let us know how we can best support you.