LEGACY BUILDING:

Mapping Out a Charitable Plan for the Future

By J. Bradley Britton, J.D., LL.M Director of Planned Giving and General Counsel, The Columbus Foundation

What is charitable planned giving? My shorthand definition is that it’s any charitable gift that takes more thought than just writing a check, or these days, doing a quick online gift with your credit card.

To put it more formally—it’s charitable giving that takes place in the context of a donor’s overall tax, financial, and estate planning, and which is also a reflection of the donor’s values.

The matter of values does come first. Sometimes a discussion of planned giving can get lost in the weeds of tax law strategies, and the acronyms—CRATS, CRUTs, CGAs, etc.—can become overwhelming. But a donor thinking about a planned gift first needs to focus on addressing some fundamental personal questions, with answers unique to them. These questions include:

• What portion of my wealth do I want to devote to myself (while I’m living) vs. my loved ones (while I’m alive or after I’m gone) vs. charity?

• What charitable causes do I care about?

• What priority do I want to give amongst those causes?

• Do I want to give big, one-off lump sums to charities, or do I want to create a longer-term legacy? There does not need to be an all-or-nothing answer to this question.

If you think about yourself in relation to these questions, you can see how each person’s own special mix of values comes into play. The answers are not “cookie-cutter.”

Here at The Columbus Foundation, we work with donors and their professional advisors to explore donors’ values, define their plans, create a long-term charitable fund to carry out those plans, and develop a document setting forth the future use of their charitable fund. So, if you’ve determined that you want to engage in planned giving, what assets and techniques can you use? During your lifetime, planned gifts might take these forms:

• Cash: this might not just be a matter of writing a check or making a credit card gift. If you are over 70 ½, you could consider making a tax-favored “qualified charitable distribution” from your individual retirement account directly to a charity—possibly to establish a charitable fund at The Columbus Foundation.

• Appreciated, publicly traded securities, such as stocks traded on an exchange and mutual funds, allowing you not only to obtain a tax deduction but also to avoid paying tax on gains in such assets.

• Privately held business interests and real estate. These gifts are more complicated but can be very generous.

• Existing life insurance policies that you no longer need for their original purpose.

Now, I’ve always been told not to use the “d” word when talking about charitable giving, because it’s unpleasant to talk about death. But, as it happens to all of us, it’s important to keep in mind. Here are some ways to provide for a planned gift after your death:

• Bequests under a will, or a revocable trust that serves as a will complement or substitute.

• Naming a charity as a beneficiary of a retirement plan or life insurance policy, on a beneficiary designation form. This form is often just as, or more, important than one’s will because these assets can make up the bulk of many people’s wealth.

• Brokerage accounts put in “transfer-on-death” format, and bank accounts put in “payable on death” format.

Then there are so-called “life income gifts” that can make a stream of payments to you and/or someone else for a certain period of time, with what’s left going for a charitable purpose, including to a charitable fund you create at The Columbus Foundation. These techniques include:

• Charitable remainder annuity trusts and unitrusts.

• Charitable gift annuities.

This is just a brief overview of possibilities in the world of planned giving. I’ll end by saying that my colleagues at The Columbus Foundation and I are happy to talk to you and/or your attorney, accountant, or financial advisor about ways to create a planned gift that makes the most sense for you and your family’s unique tax and financial lives, and for the charitable causes you care about.

For more information about planned giving and services offered by The Columbus Foundation, visit columbusfoundation.org.

Reach J. Bradley Britton directly via his link on The Columbus Foundation Staff page.