There are certain priorities that you are invariably going to have when you are planning your estate. Clearly, making provisions for the well being of your family is probably going to be at the top of the list. But in addition to this, it is only natural to consider your broader legacy as well and ask yourself what you may be able to do for the community as a whole. To this end, many people make charitable giving a part of their legacy plans.
Of course the most high profile charitable giving vehicles are private foundations, but these are very expensive to operate. Most people are not in a position to create their own private foundation, and even those who do have the resources to do so may feel as though the operating costs make that route inefficient.
A good alternative exists in the form of donor advised funds. These funds are housed within public charities, and they are also offered by some financial services companies. The way that it works is you make a single contribution into the fund, and you can then in turn advise it with regard to how grants are endowed. In this manner you can recommend that the fund give grants to multiple different charities, but you only make one donation to make this possible, streamlining your accounting.
From a tax perspective there are some benefits that go along with making contributions into a donor advised fund. You are entitled to a charitable deduction for the amount of your initial contribution, and it can be taken during the year the contribution was made even if no grants are issued during that year. The value of your estate is reduced for estate tax purposes by making the contribution, and if you donate appreciated securities they are not subject to capital gains tax.
To learn more about donor advised funds and charitable giving, simply arrange for a consultation with an experienced, licensed estate planning lawyer.