Blog , Finance

The Kids are Alright: Charitable Planning for the Future

Posted on Wednesday, March 3, 2021
by Outside Contributor

Sponsored By – DonorsTrust

There is a stack of baseball cards in my hand, and they have me missing my Dad.

I’ve spent days transforming my oldest child’s bedroom into a “young adult’s” room. As I’m sprucing up his room, I’m clearing out some of the Red Sox banners and Patriots hats that dominate the current decor.

But some of this baseball memorabilia I can’t bear to move.

In front of me is a bat signed by Frank Howard, a star player for the Washington Senators’ baseball team from the 1960s. Growing up, I heard many stories about “The Washington Monument” (as the 6’7″ home run hitter was known). That’s because my Dad and his brother worked as bat boys for the Senators in the late 1950s.

Can you imagine a bigger dream for an American boy than sharing the dugout with greats like Harmon Killebrew and walking the same field as Mickey Mantle and Joe DiMaggio?

Make it Simple

Dad was very thoughtful in sharing important belongings with his children and grandchildren: like these baseball cards in my hand and the Frank Howard bat in front of me. His planning via life insurance policies and bank accounts, on the other hand, left much to be desired.

This is what I wish I had said to my Dad while he was alive: “Dad, it’s very easy to get organized for the inevitable!

While thinking about how assets will be distributed upon your death is a sensitive subject, there is great peace of mind on the other side once your plans are in place.

A Trusted Partner

Dad left me quite a puzzle to figure out after he was gone. But rather than leaving me pages of notebook paper, Dad could have worked with a donor-advised fund (DAF) to arrange for his passing.

Donor-advised funds are increasingly popular for donors as a way to simplify their giving in a tax-advantaged way. They work like a charitable savings account, and there are more than a thousand providers of DAFs, from commercial banks to community foundations to mission-driven funds built around a set of shared principles, such as DonorsTrust, where I work.

DAFs aren’t just for giving during your lifetime, though. Making a DAF account the beneficiary of your will (or of a charitable remainder trust, your IRA accounts, or other elements of your estate) is a simple way to streamline – and protect – your charitable legacy. Making subsequent changes is just as simple. It’s why we view DAFs as a “charitable hub” for your legacy plans (read more about that idea here).

One of the benefits of using a DAF in your estate plans is that you can change up the charities you would like to receive gifts after your passing without needing to pay a lawyer to revise the actual will. Simply leave your advice with the fund provider.

If Dad had used a donor-advised fund, the life insurance policies he’d bought to support his grandkids and for the charities dearest to his heart would have been neatly and easily taken care of.

Caring for Others

If Dad had opened his own bequest account to enable charitable gifts from his remaining assets (whether liquid or illiquid – like those artifacts from his batboy days!), perhaps he would have given a gift to the Institute for Humane Studies where his grandson interned or Hillsdale College where his grandson is a student. As a devout Catholic, I’m sure he would have loved to direct a portion of his funds to supporting his local church. Perhaps he would have also supported civic groups like GenJustice, which works to protect the interests of foster children since his parents fostered. With a donor-advised fund, all of Dad’s charitable interests could have benefited.

Support from a donor-advised fund could have saved me from needing to pay tax penalties on Dad’s IRA. If Dad had thought about it, he could have put his IRA in his legacy account, and he could have named my brother and me as advisors to direct donations in Dad’s name after his passing. Instead, those would-be charitable dollars were lost to Uncle Sam.

Actually, Dad was a private guy and would have benefited from the option donor-advised funds provide of offering differing levels of anonymity for charitable gifts. Maybe Dad would have named his account in honor of that Washington Senators team that few remember today, but would be remembered through his philanthropic endeavors.

A Legacy is More than Memories

As I hang his Frank Howard-signed bat in a special place in son’s room, I think again about how much our family misses Dad. Our fond memories of my beloved Dad are a substantial legacy, but I wish I’d been able to intervene to help him put his assets to use in a smarter way.

If you’re ready to do the charitable planning that Dad never got around to, my colleagues and I at DonorsTrust would be delighted to talk with you about your philanthropic legacy, and how you can achieve your goals and spare your loved ones the confusion of sorting through handwritten notes.

Stephanie G. Lips is a Philanthropic Advisor at DonorsTrust, a mission-driven donor-advised fund committed to preserving donor intent for liberty-minded donors. Article reprinted with permission from the Intentional Giving blog.

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