A charitable giving strategy might be a new concept for many individuals, certified financial planner Jalene Hahn writes in the Indianapolis Business Journal. While Vanguard Charitable found that three quarters of American adults donate money each year to a charity, religious, or nonprofit organization, she points out, few of us have an actual plan that continues through our lifetimes and then is expressed in our estate planning documents.
Hahn suggests four key components of an effective plan:
- Setting an annual budget, allocating a specific percentage of your disposable income.
- Using a 5 Ts framework:
- Time – volunteering hands-on labor and physical presence to help an organization.
- Talent – sharing your professional skills and specialized knowledge pro bono.
- Treasure – donating money or property
- Ties – connecting an organization to your own social network, introducing potential donors
- Testimony – advocating for a cause
- Choosing a charitable giving “vehicle”
- direct gift
- donor-advised fund
- qualified charitable distribution from an IRA
- Gathering an advisory team
At Geyer Legal, we especially appreciate the following piece of advice Jalene Hahn offers:
“Including children in this process will reinforce your values and encourage them to follow suit.” As Indiana estate planning attorneys, we do not provide tax or investment advice, instead collaborating with our clients’ advisors to help them define their charitable giving goals and determine the most effective strategies for passing income and assets to future generations through thoughtful planning.
In fact, we have come to realize, it’s not only charitable giving strategies that are best shared with the younger generation, but all estate planning reasoning and intention. Sure, initiating inter-generational conversations can be awkward, even overwhelming, but through insights our attorneys have gained from decades of helping Indiana families, we try to bring “big” family conversations down to “comfortable size”.
From a practical standpoint, family conferences help acquaint the younger generation with the members of their parents’ advisory team. Not only will this make settling parents’ affairs much simpler later on, but, even more important, allows parents to openly share with loved ones the values and assumptions – along with the issues – that have gone into their estate planning choices.
Consider expanding the concept of a charitable giving strategy, creating an overall estate planning “continuum”.
– by Cara Chittenden, Attorney with Geyer Legal
