When people do estate planning, they often don’t think about supporting the causes that have been important to them. Yet, it turns out that most people do want to use their estates to help change the world. When asked about giving during the estate planning process, people give up to six times more if they’re reminded to think about it.
We know this because we co-founded FreeWill — an online tool that helps people with estate planning and encourages them to think about making a bequest (a gift in will or trust).
Here are four reasons why it’s a good idea to think about leaving some assets to causes that are meaningful to you:
1. It makes estate planning easier to think about (and sometimes even enjoyable). Only 54 percent of U.S. adults over 55 have a will that directs where their money will go once they pass away. And fewer than 30 percent of all Americans have an up-to-date will. One big reason so many of us die without making our wishes known to our loved ones and others is that dying is an event we may not want to contemplate. Framing a discussion in a more positive light — about the impact you would like to make, from saving the redwoods to supporting your local church or synagogue — triggers happy memories. That transforms a potentially miserable process into a source of joy.
2. It’s likely to be the most important donation you’ll ever make. An Internal Revenue Service study found that a typical bequest is almost three times larger than the total amount that person has donated in his or her lifetime (on FreeWill, it averages at $69,000). Choosing causes on which you’re going to have an enormous impact is immensely satisfying. But with so much money at stake, it’s worth thinking carefully about where you want to have impact and why.
3. Charities are ready to celebrate you. A new bequest can mean a dramatic increase in a nonprofit’s ability to have impact. Many organizations have “legacy societies” to honor people who have put a gift in their future plans. People within the legacy society are invited to special events, given gifts and warmly thanked. The Cleveland Museum of Art, for example, has yearly receptions and tours for members of its Legacy Society. Save the Redwoods League does something similar. These events give you the opportunity to meet like-minded people and receive recognition for your generosity.
4. Thinking about giving at death can change your life today. A will is actually one of the most profound manifestations of your own values. In making the decision about where their money goes, people often end up with a deeper understanding of themselves, what matters most to them, and why.
Some people know which causes they would like to assist; they’ve been working on issues close to their heart for years. Others prefer to explore and understand the impact they may have.
If you’re part of the latter group, we recommend checking out these resources to help:
Charity Navigator for a summary of financial metrics, mission and similar charities with more than $1 million in annual revenue.
Guidestar for detailed financial data on charities based on federal tax filings.
Givewell for in-depth research on international economic development nonprofits.
Animal Charity Evaluators to understand the impact of those types of nonprofits.
How to Make a Bequest in Your Will
For many people, making a bequest in a will is straightforward. You simply specify the share of your assets or absolute value you would like to go to a good cause. When doing this, it’s worth writing a note explaining why the issue matters to you and any specific element of the nonprofit’s work you prefer to assist.
A number of sites online (including ours) offer the opportunity to make a will with a bequest. For more complex, or large, bequests, it’s best to talk to an attorney.
Next Avenue Editors Also Recommend:
- Estate Planning 101
- Probate, Wills, Executors: Your Estate Planning Questions Answered
- Donor-Advised Funds: Timely, Tax-Saving Way to Give to Charity
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