Giving back is a meaningful part of many people’s lives—and for those with philanthropic values, it’s something they often want to continue beyond their lifetime.
Whether you want to support your favorite charity, fund a scholarship, or leave a legacy tied to a cause that matters to you, thoughtful estate planning can help you achieve your long-term charitable giving goals in a structured, tax-efficient way.
At Peabody Law Firm, we assist clients across Southlake, Westlake, Trophy Club, Colleyville, Keller, and surrounding communities in designing estate plans that align with both financial objectives and charitable aspirations. Below, we explore key estate planning strategies that can help you leave a lasting legacy through giving.
Why Include Charitable Giving in Your Estate Plan?
Charitable giving through your estate plan can provide both personal and financial benefits. In addition to supporting organizations and causes you care about, planned giving can:
- Reduce estate taxes
- Offer current income tax deductions
- Minimize capital gains taxes on appreciated assets
- Provide income for you or your heirs
- Leave a legacy that reflects your values
Best of all, estate-based giving allows you to make impactful contributions without compromising your lifetime financial security.
1. Charitable Bequests in Your Will or Trust
One of the simplest ways to leave a legacy gift is by naming a charitable organization as a beneficiary in your will or revocable living trust.
You can specify:
- A fixed dollar amount (e.g., $50,000 to a local animal shelter)
- A percentage of your estate (e.g., 10% to a faith-based nonprofit)
- A residual bequest (what remains after all other gifts are distributed)
Benefits of charitable bequests:
✔ Easy to set up and modify
✔ Reduces estate tax liability
✔ Ensures your values continue to impact future generations
Including a bequest is especially effective for individuals who want to make a significant contribution but need access to their assets during life.
2. Donor-Advised Funds (DAFs)
A donor-advised fund allows you to contribute assets during your lifetime and recommend grants to your favorite charities over time. While not technically part of your estate, DAFs are often included in estate plans because:
- You can name successor advisors (e.g., children or grandchildren) to continue charitable giving
- You receive an immediate tax deduction when funding the account
- You retain control over how and when grants are distributed
A DAF is ideal if you want to involve your family in philanthropy, create a long-term giving plan, or retain flexibility over how charitable dollars are used.
3. Charitable Remainder Trusts (CRTs)
A Charitable Remainder Trust is an irrevocable trust that pays income to you (or another beneficiary) for life or a set period of time. When the trust term ends, the remaining assets are distributed to the charitable organization(s) of your choice.
Benefits of a CRT:
- Provides lifetime income to you or a loved one
- Offers capital gains tax relief on appreciated assets
- Delivers a partial income tax deduction
- Reduces the size of your taxable estate
This strategy is excellent for individuals with highly appreciated assets (e.g., stock, real estate) who want to unlock value while still giving back meaningfully.
4. Charitable Lead Trusts (CLTs)
The reverse of a CRT, a Charitable Lead Trust provides income to a charity for a period of years, with the remainder going to your heirs. It’s a powerful way to:
- Reduce gift and estate taxes
- Transfer significant wealth to heirs at a reduced tax cost
- Make consistent, long-term contributions to a cause you care about
CLTs are particularly beneficial for those looking to minimize estate taxes while keeping assets in the family.
5. Naming Charities as Beneficiaries of Retirement Accounts
IRAs and other retirement accounts are taxable to heirs, but when left to a qualified charity, the organization receives the full amount tax-free.
This approach allows you to:
- Use tax-deferred accounts for giving, preserving more tax-efficient assets for family
- Simplify your estate administration
- Make impactful donations with little legal complexity
To implement this, simply complete a beneficiary designation form through your retirement account provider and name the charity as a full or partial beneficiary.
6. Creating a Private Foundation
For those with a larger estate and a desire for long-term charitable impact, establishing a private family foundation may be the best option.
Foundations allow:
- Control over how grants are distributed
- A structured platform for family involvement in philanthropy
- Long-term recognition and legacy preservation
- The ability to fund scholarships, specific programs, or community initiatives
Foundations do require more administrative oversight, but for the right families, they can become a meaningful centerpiece of legacy planning.
Final Thoughts: Aligning Your Legacy with Your Values
Philanthropy isn’t just for billionaires. Whether your goal is to support your church, fund a local library, or contribute to medical research, estate planning gives you the tools to do it effectively and tax-efficiently.
At Peabody Law Firm, we work closely with individuals and families to ensure their estate plans reflect their personal values and charitable goals. If you’re interested in building a legacy that gives back, we’ll help you structure your estate so that your generosity continues to make an impact long after you’re gone.
We proudly serve clients in Southlake, Westlake, Trophy Club, Colleyville, Keller, and nearby communities.
Contact Peabody Law Firm today to start designing an estate plan that honors your heart and secures your legacy.
Legal Disclaimer
This article is for educational purposes only and does not constitute official legal or financial advice. Estate planning laws are complex and subject to change. Individuals should consult with a licensed estate planning attorney to determine the best strategies for their unique situation.