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Since 2008 the third week of October has been designated National Estate Planning Awareness week. That makes this an excellent time to review your own plans or, if estate planning has not yet risen to the top of your to-do list, to get started putting plans in place.

The nature and complexity of planning will vary from person to person, depending on the specifics of their personal life circumstances. In addition to naming the beneficiaries of your estate at your passing, good planning is likely to address strategies during your lifetime to grow and protect your assets, to manage taxes, and to have a plan for managing your financial affairs and personal health matters should you become unable to do so yourself.

Given such a broad scope, you’ll want to be sure you have an estate-planning “team” of trusted financial and legal advisors to guide you through the journey. A well-crafted plan increases the likelihood of making that path smoother during your life and optimizing the financial benefits for the beneficiaries you name to receive your assets at your passing.

For those with major charitable goals, it is important to focus on ways creative charitable planning can enhance the results of your estate planning. Here are a few ways that can happen:

Charitable gifts through your estate can deliver tax savings. With estate-tax rates that go up—quickly—to 40%, the savings can be significant IF your estate is worth more than $15 million. If not, your gift will generate no estate-tax savings.

ALTERNATIVE. If your estate is worth less than $15 million and your personal circumstances permit, consider the benefits of making a gift during your lifetime:

• Producing income-tax savings of up to 35% of the amount of the gift.
• Increasing the net amount of your estate passing to other beneficiaries.

Choose the right asset to fund estate gifts. Leaving certain assets to individuals may create income-tax obligations for them—for example, holdings like IRAs whose value is composed of funds that have never been subjected to federal income tax. Those previously untaxed amounts will eventually become taxable income in the hands of the beneficiary who receives them.

However, if the recipient is a qualified tax-exempt charitable organization like ours, it will not pay any tax and retain the entire value of the distribution to further its mission. Bottom line: Leave IRAs and similar assets with potential income-tax implications to charity and direct other assets to individuals.

Fund current lifetime charitable gifts with long-term appreciated assets. Instead of using cash to make annual charitable contributions, consider giving appreciated assets—such as stock investments—that you have held for more than one year. Reason: You can deduct the full fair-market value of the stock, but you don’t have to pay tax on any of the increase in its value during the time you have held it.

We welcome the opportunity to meet with you and your advisors to discuss how creative charitable planning can enhance the results of your overall estate planning. Contact us and we can arrange a time to talk that fits your schedule.