Rethinking legacy
Next time you meet with your estate planning attorney, it may be a good idea to check in on your long-term plans and ask yourself questions you might not yet have considered. Some planners, for example, report that more and more clients are reconsidering an automatic estate distribution to heirs. Instead, their clients are evaluating what type of legacies make the most sense and working hard to prepare children and grandchildren to receive that wealth. Times are changing, and regular, careful estate plan reviews with your advisors are more important than ever.
Here are three interesting emerging themes:
They don’t need it—or want it.
Sometimes it makes good financial sense for heirs to disclaim inheritances from their parents. This Wall Street Journal article (subscription required) is instructive, noting that heirs can sometimes benefit from refusing an inheritance, allowing assets—especially tax-heavy ones like traditional IRAs—to pass to contingent beneficiaries in a more tax-efficient way. Legal disclaimers provide post-death flexibility for families to adjust estate plans in response to current circumstances, though they must be executed carefully to comply with strict rules.
Strategic giving leads to local giving.
High net worth donors are becoming more intentional and strategic in their charitable giving, focusing on outcomes, alignment with personal values, and long-term impact rather than making purely reactive or broad-based donations. Alongside these changes is a growing preference for supporting local organizations, as donors increasingly want to see the direct effects of their contributions within their own communities.
Hands-on local involvement and proactive planning go hand in hand.
Donors using donor-advised funds are particularly locally focused, as evidenced by volunteering statistics. These donors are significantly more likely to volunteer their time—especially within their own communities—demonstrating deeper, hands-on engagement with the organizations they support. This combination of higher volunteerism and frequent giving suggests that donor-advised fund donors are not only more active philanthropically but also more personally connected to local causes and community impact.
To learn how these trends might apply to your situation, please reach out to the community foundation! Our team is happy to work with you and your advisors to structure a charitable giving plan—including a donor-advised fund, cause-specific fund, legacy fund, and more—that meets your overall financial and estate planning goals while also ensuring that your wealth can help improve the quality of life in our region for years to come.