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How Charitable Giving Can Enhance Your Legacy Planning

Oct 01, 2024

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After spending a lifetime building your family’s financial and philanthropic identity, it’s natural that you would want that story to continue beyond your lifetime. Planning a legacy isn’t just about being financially savvy and diversifying your estate but about making sure that your impact in the communities you care about continues for generations. 

Greater Houston Community Foundation can help you make a difference for years to come by strategically incorporating charitable giving into your estate and legacy plans. Leaving a legacy is not just about making sure your wealth accomplishes your personal and philanthropic goals but also about helping your heirs develop new goals to reach new heights and strengthen your family’s legacy. 

Keep reading to learn more about how charitable giving can be incorporated into your estate and legacy planning, or reach out to Greater Houston Community Foundation directly to start planning today. 

Key Insights

  • Charitable legacy planning is a crucial component of estate planning, allowing donors to continue their philanthropic work after they’re gone and ensure that their impact lives on.
  • Legacy planning is essential for anyone who wants their values and philanthropic efforts to continue after their lifetime, but it can be vital for high-net-worth individuals and families. 
  • Legacy planning focuses on the long-term impact of your values and beliefs, whereas estate planning describes the larger umbrella of services required to manage and distribute your assets.
  • Incorporating philanthropy into your estate plan ensures that your assets continue to support your values and contribute to your legacy.
  • Having Greater Houston Community Foundation work with your professional advisors can help strategically incorporate charitable giving into your legacy and estate plans.

Table of Contents

Who needs legacy planning?

Contrary to popular belief, legacy planning is not just for older individuals—legacy planning is essential for anyone who plans to leave an impact that will continue after their lifetime. 

Whether you’re already involved in philanthropy or are just passionate about a few causes, legacy planning can help ensure that your values are represented and that your family can continue to honor them after you’re gone. 

Although planning a legacy is essential on the individual level, it can be especially powerful for families. Teaching your children and grandchildren to support their communities fosters a culture of giving, which helps spread your philanthropic impact in your community and beyond.

Continue reading about philanthropy for high-net-worth individuals and families.

What does legacy planning mean?

Legacy planning is the process of deciding what impact you wish to have on the world after you’re gone and putting strategies into place to make this impact a reality. Planning your legacy means uniting the intangible aspects of your life, like your values and beliefs, with the tangible processes of asset management and distribution. 

Is legacy giving the same as planned giving? 

Planned giving is just one concept under the umbrella of legacy planning. Your legacy might involve setting up planned giving in the form of recurring donations to important causes, setting up charitable foundations, or starting a scholarship fund in your community—whatever can be done to continue the important work of your philanthropic life after you’re gone. 

Continue reading: How to start a scholarship fund

The role of charitable giving in legacy planning

A sound legacy plan allows you to make sure that your life’s work, values, and impact will remain long after you’re gone. One of the key components in any comprehensive legacy plan is charitable giving. 

Implementing well-established plans for your philanthropic efforts is one of the most effective ways to ensure a lasting positive impact while solidifying your legacy for generations. Engaging in charitable giving can take various forms, including outright gifts, the creation of charitable trusts, or consistent contributions to your chosen causes. By strategically committing to these initiatives, you enhance the lives of others and reinforce the values and principles that define you, ensuring that your generosity continues to resonate.

The role of charitable giving in your legacy plan isn’t just about positive impact and the concept of your legacy—it can also provide significant tax benefits for your estate. 

Legacy planning vs estate planning

While legacy planning falls under the estate planning umbrella, the two describe distinct processes which should be done in collaboration with one another. 

In contrast to how legacy planning addresses your aspirations and your values after you’re gone, estate planning attempts to address tangible financial matters by organizing and managing your assets. The estate planning process can involve creating wills, establishing trusts, and making arrangements to manage your estate in the event of your incapacity.

Estate planning is primarily concerned with ensuring financial security for your beneficiaries, minimizing taxes, and avoiding legal complications, and much more. A well-structured estate plan can prevent disputes among heirs, protect assets from creditors, and ensure that your estate is distributed efficiently and according to your wishes.

If you own property, have dependents, or are otherwise interested in preserving your financial legacy, charitable estate planning should serve as a foundation for your legacy planning.

The differences between legacy planning and estate planning

While legacy planning and estate planning are closely related, they serve distinct purposes and endeavor to accomplish different things for your life and legacy. 

  1. Focus: Legacy planning is primarily concerned with the impact you will leave on the world, while estate planning focuses on managing and distributing assets during and after your lifetime.
  2. Timeframe: Legacy planning should look far beyond your lifetime, while estate planning should focus on current needs and the immediate future of your assets after your passing. 
  3. Purpose: The purpose of planning your legacy is to better reflect your values and beliefs, while organizing your estate is setting your family up for financial security, minimizing taxes, and avoiding legal disputes. 

The connection between legacy planning and estate planning

Although legacy and estate planning serve different purposes, they are deeply interconnected. Estate planning is the foundation for legacy planning, and incorporating philanthropic financial planning can help make sure that your estate can support your aspirations for legacy giving.

In the same way that a solid estate plan is a necessary foundation for your legacy plan, good legacy planning can help ensure that your estate supports your values, contributes to your legacy, and makes an impact that you will be proud of for years to come. 

The two support and enhance one another. If you’re looking to start planning your legacy and have not set up a comprehensive estate plan, you should begin by looking at your estate’s tax efficiency, diversification, and relative safety with an estate planning professional today. 

Continue reading about estate planning and charitable giving

How a legacy planning partner can help you get started

Incorporating charitable giving into your legacy planning and estate planning is a powerful way to enhance your impact and ensure that your values continue to shape the future. By thoughtfully planning your charitable contributions, you can leave a meaningful legacy that accurately reflects your life’s work and principles.

If you’re unsure where to start, consider working with a foundation that specializes in charitable giving. Greater Houston Community Foundation can help you identify causes that align with your values, structure your charitable contributions in a tax-efficient manner, and help ensure that your donations have a lasting impact.

The Foundation will work with your existing professional advisors to better integrate charitable giving into your current estate and legacy plans. Whether you’re looking to set up a scholarship, establish a donor advised fund, or create a structured philanthropic plan when engaging the next generation, Greater Houston Community Foundation can help. 

Call us at 713-333-2210 or reach out directly to get started. 

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