Many people who accumulate social capital will look for opportunities give back and support their favorite causes. Charitable estate planning is a fantastic way of building a philanthropic legacy while protecting the wealth you have worked so hard for. It can also help you save on income, estate, and other taxes. Here are five popular vehicles for charitable planning:

Outright Gifts. This is one of the simplest forms of charitable giving. The person selects the organization(s) and either transfers the property during their lifetime or makes a specific gift in their will or via a trust.

Gift of Life Insurance. There are two ways of gifting with life insurance. The first is charitable legacy life insurance planning, which is when an individual designates a charity as a policy’s beneficiary, they gift an old policy to a charity, or they purchase a life insurance policy for the benefit of a charity. The second is director’s legacy charitable insurance planning, which is when a company pays the life insurance policy premiums of its board of directors, the director selects his or her favorite charity as the owner of that insurance policy, and then at the director’s death the charity receives the policy benefits.

Charitable Remainder Trusts. This is a type of split interest trust. In a charitable remainder trust, an individual puts assets into the trust (removing the assets from their estate). During that person’s lifetime, they will receive a fixed income stream from the trust. After they pass away, a named charity will inherit the balance of the assets in the trust.

Charitable Lead Trust. This is another type of split interest trust. With a charitable lead trust, an individual puts assets into the trust. During that person’s lifetime, a named charity receives an income stream from the trust. After the person dies, their heirs will inherit the balance of assets left in the trust.

Private Family Foundations. This is a privately funded charitable organization that either makes grants to public charities or actively conducts charitable activities of its own. It can be in the form of a trust or a non-profit corporation.

While charitable estate planning vehicles are excellent for building a philanthropic legacy, the process of charitable planning can be complex – and may lead to serious financial problems if improperly executed. If you are interested in enlisting the help of board-certified experts in estate planning, contact Wealth Planning Law Group at (504) 608-3174 or info@lawealthplan.com.