5 Ways To Create A Charitable Giving Plan For Yourself

How do you manage your charitable and gift-giving activities each year? While many people give generously, they often don't have a set plan for doing so. Should you create a giving plan for now and for the future? If so, here are five ways to do just that. 

1. Make Giving Part of Financial Planning.

When you meet with a financial planner, do you prioritize planned giving? By including specific discussions about charitable contributions and other forms of giving, you make this a standard part of your finances in the same way that you manage other expenses. You also help your advisor to understand where your priorities are and how they can help you. 

2. Do Estate Planning.

Estate planning is one of the largest means of charitable giving that most people use. It's one more reason that you should proactively engage in good estate planning even when young. If you die without the right plans in place, your assets will not be given to charitable enterprises but rather distributed among heirs whose actions you have no control over. 

3. Consider Special Vehicles.

Certain legal tools exist to ensure that your charitable giving is efficient and organized and that your wishes are carried out. One of these is a trust, which separates assets from the donor's personal assets. Trusts are often used in estate plans to avoid probate, protect privacy, and ensure continuity. You might also use a charitable foundation, which is specially designed for charitable giving but which also continues as a separate entity even after your death. 

4. Use the Gift Tax Exclusions.

Every American taxpayer can make use of a tax exemption to give money directly to individuals each year. As of 2020, this exclusion from taxes can be applied on up to $15,000 per donee, per taxpayer. Can you use the gift tax exclusion to advance and organize annual giving? Can it help reduce taxes to your estate or heirs upon your passing? Can you give to heirs in ways that will impact their lives now? 

5. Automate Your Giving.

While reaching into your wallet and gifting money is fulfilling, it may not be the best way to plan your donations. Instead, look for ways to automate your giving. This could be as simple as making automatic recurring monthly donations rather than one-time donations. Or you could create an account specifically for gifting and have the proceeds distributed on a regular basis. Automation takes out the guesswork. 

Which of these methods of planning for charitable efforts could make your giving more effective and even more generous? No matter what route you take, the result is sure to be an even greater feeling of the joy of giving. Learn more by discussing charitable gifts with your wealth management planning service today.