Philanthropy adds to the kids' inheritance

By Trudy Lee

director of planned giving

Southeast Missouri State University Foundation

You've probably seen the bumper sticker on an RV that reads: We're Spending Our Kids' Inheritance. Up front, grandma and grandpa are having a ball enjoying their well-deserved retirement and don't mind poking fun at the idea that they should live conservatively so they can leave more money for their children.

Not everyone feels that way. Many seniors are eager to leave their offspring a nice nest egg. They remember the tough times and want to make life a little easier for the next generation. So when confronted with the idea of giving some of their wealth to a worthy charitable organization, they respond, "If I give these assets to charity, I won't be able to transfer them to my own family."

Truth is, you don't necessarily have to decide between charity and your family. There are ways you can make a legacy gift to your favorite charity and protect your family as well. Consider these possibilities:

Insurance

Some donors use life insurance to replace the wealth they give to charity. A second-to-die policy placed in a special trust can be quite reasonable and provide the beneficiaries with proceeds that approximate the amount given charity and that are not subject to estate tax.

Life income charitable trust

You can establish a charitable trust now and receive income for the remainder of your life, and then have the income directed to your children. At the end of the trust, the principal will go to charity.

Testamentary charitable trust

This option refers to a trust that is established through your will when you die. You can arrange for income to be paid to the charity for a limited time and then have the principal go to your loved ones. Or, you can provide income to your loved ones for a limited time and then have the principal go to the charity. In both cases, estate taxes will be reduced.

Consider the advantages of a plan that includes a provision for family members and resources for charitable organizations beyond the financial benefits. A legacy gift makes a positive statement and a clear declaration of your values. It may encourage others, including children and grandchildren, to go and do likewise.

As friends and family members plan their own estates, they may recall your generosity and thoughtfulness. Your legacy of giving may unlock resources for charity and bring the joy of giving to future generations.

Remember, these special planning tools are not for everyone. Check with your professional adviser to see if they fit into your plans. Contact your favorite charity. And visit Leave A Legacy of the Heartland's new Web site at www.leavealegacyheartland.org for information on the many ways you can leave your legacy.

Maybe your bumper sticker could read: We're Adding to Our Kids' Inheritance!