Planned Giving 101
This October, we broke down aspects of planned giving for the Waterloo community. We've put those aspects into easily digestible and doable terms. Keep reading to explore planned giving with us.
Let's start with the basic definitions of important words to know when discussing estate planning.
The process of understanding how you want your assets to be handled once you've passed, or when you can't hand items on your own. Estate plans, at minimum, include will/trust, power of attorney, guardianship statuses, advanced healthcare directives, and beneficiary designations.
Also known as legacy planning and giving.
Tangible and intangible items including anything from your money to jewelry, to your car, and basically anything of current or future value.
Next, let's explore each item typically included in an estate plan.
Wills ensure your property is distributed according to an individual's wishes. A will/trust is an overarching document that is consistent with how you have named the assets that are distributed outside the will (retirement account, etc.)
POWER OF ATTORNEY
A power of attorney is someone who will act on your behalf when you cannot do so yourself. Without a power of attorney, a court may be left to decide where your assets go and how they are distributed and it may not be what you wanted.
Naming a power of attorney gives them power to sell your real estate, enter into financial transactions and make other legal decisions on your behalf.
If you have minor children, picking a guardian in the case of your absence is incredibly important. It is also important to discuss this with the individual or couple you choose and a backup or contingent guardian should be named in case your initially named guardian selection is uncapable at the time.
ADVANCED HEALTHCARE DIRECTIVES
Advanced healthcare directives are legal documents that provide instructions for medical care and only go into effect if you cannot communicate your own wishes. For example, you could state your wishes about life-sustaining medical treatment if you are terminally ill or permanently unconscious.
A beneficiary is an individual who receives benefits or assets from specific things that are passed down outside of your will (think 401k, life insurance, etc.). Like mentioned above, if you don't name a beneficiary a court could be left to decide the fate of your funds.
Now that we know the main items in an estate plan, why are estate planning and legacy giving important?
CONTROL YOUR WISHES
Most importantly, your estate plan states your wishes for any assets you leave behind. Whether you are planning a financial contribution to your favorite nonprofit or deciding your asset distributions amongst your loved ones, estate planning keeps you in control of your wishes.
As this is YOUR plan, you can customize the intent of your gift and determine how organizations plan to use these dollars.
CREATE LASTING LEGACY
Organizing a planned gift leaves a lasting legacy on a community. A nonprofit can sustain a program for years to come all thanks to you. Whether leaving a bequest as a tribute to a family member or creating a legacy for themselves, donors benefit from planned gifts because they can make a lasting impact on a cause that’s important to them.
Charitable options have various tax benefits. By working alongside nonprofits and in tandem with professional advisors, individuals can utilize different strategies to reap the benefits of tax-exempt contributions, income tax deductions, and reducing federal estate taxes.
Should you be planning your estate? YES! Estate planning is for everyone - it is recommended once you turn 18 to begin thinking about your own estate plan.
So...what comes next?
Use these resources:
START A CONVERSATION
Talk to your financial advisor/attorney about the steps to start your estate plan. Don’t have one? Check out the following links from Grow Cedar Valley to browse the best fit for you.
MEET WITH US
Let’s talk about options that work best for you and your family, and how we can customize your gift to create a lasting impact for Waterloo Schools students and staff, the Cedar Valley community, and beyond. Contact Hannah to set up a time to meet by emailing firstname.lastname@example.org or calling (319) 269-5129