You are here:

Seven Myths about Planned Giving

  1. You have to be rich to make a planned gift.

The reality is that anyone – no matter their income level – can make a planned gift.  In fact, most planned gifts are made by donors of moderate means. 

You’ve been generous throughout your lifetime.  By being intentional, you can continue that legacy of generosity after you are gone.

  1. You have to pay an attorney to create a planned gift.

If you are updating your full estate plan, you may indeed want to get legal advice to do so.  However, often the most tax-efficient planned gifts are made with retirement fund assets like your IRA or 401(k).  You simply need to update your beneficiary designation to make this gift.  Talk to your financial advisor who can help. 

  1. A bequest through my will or a distribution through my trust is always the best way to leave a donation to my favorite nonprofit organization.

Not always!  With a little planning, you can make a gift that will save your heirs on their taxes and support your favorite organizations at the same time. 

By way of example, retirement fund assets that pass to your children at your death will be taxed as ordinary income to them.  This income stacks on top of their other income, and so the tax hit can be significant.  If, instead, you use your retirement assets to make your gifts to charity, you can avoid this additional income tax altogether.  Your financial advisors can review your tax situation to help you make the decisions that are right for you.

  1. Updating my estate plan is an end-of-life preparation.

Actually, just the opposite.  By updating your estate plan, you are taking care of the people and the nonprofit organizations that mean the most to you.  This one act alone will give you peace of mind so that you can enjoy your life to the fullest without worry for what will happen after you are gone. 

If you don’t create a will, the state has a plan for your assets.  It just may or may not be what you would have in mind.  In fact, depending on your situation, the state’s plan may be a far cry from what you want.  Plus, you are creating an additional burden on your family to take care of all of those details after you are gone.  It’s so easy to create an estate plan and to continue to support your favorite causes too.  Why leave that to the state’s judgment about how to distribute your property?

  1. I can’t support both my family and charity through my estate plan.

Many people leave all of their assets to their family, thinking that’s what they need to do.  With a little help from your financial advisor, you may learn that leaving even a small gift to your favorite organization will still leave enough for you to support your family.  Also, when you factor in the tax situation for your estate, you may be able to donate more than you thought.  A financial advisor can help you think through what might be right for you.

We encourage you to involve your family in your decisions. You can make this process about celebrating who you are, what values you hold dear, and how you want to be remembered after you are gone.  By sharing your plans for generosity with your family, you are creating a legacy that’s about more than money.

  1. I have to know exactly which organizations I want to support when I create my will.

One advantage of working with the Community Foundation of Greater Huntsville to do your legacy giving is that you can identify a focus area that is important to you – such as arts and culture, or historic preservation, or college readiness – and we can make your plans come alive after you are gone.  By creating a fund at the Community Foundation, we will use your priorities to dictate the grants made from your funds.  We have a dedicated Board of Directors who ensure that our donors’ wishes are followed.  We also convene Grants Committees of community leaders to make grants based on the criteria provided by our donors.  Situations change.  Organizations change.  By creating a field of interest fund at the Community Foundation, you can plan today to meet these changing circumstances.  The Grants Committee selected to make grants from your fund will honor your wishes and steward your funds to do the most good in this community you love.

  1. I’ve already written my will, and so I’m locked into that plan.

The truth is you can amend your will at any time. Adding a gift is as simple as sharing your updated plans with your attorney and letting him or her draft an update.

For samples of simple bequest language, CLICK HERE.

By being intentional, you too can make a planned gift to support the community, the causes, and the organizations you love . . . long after you are gone.

We’re here to help.  I would be honored to help you on your generosity journey and to help you put your giving goals into action.