National “Make-a-Will Month” is a great time to remind everyone to get that last will & testament completed…and to think about your charitable plans.
Charitable planning is very personal – and there’s no right or wrong way to go about it. Many like to “give while you live” so that they can see the impact of their charitable giving. Others worry about having enough money to last them through retirement, so they choose to give through their estate.
If you like to “give while you live,” you can give directly to your favorite charities and/or design funds at the Community Foundation, such as donor advised, designated, field of interest, or scholarship funds. With a donor advised fund, you make a lump sum deposit now, take the charitable deduction for the entire amount, and then make grants to 501(c)(3) charities at your leisure. For a designated fund, you choose the charity when the fund is created, and then we automatically send a grant check to the charity on an annual basis. This option is popular for those who like to “set and forget.”
Field of interest funds are for like-minded people to pool their money to tackle an issue, such as the environment, education, historic preservation, or the arts. Scholarship funds are pretty straightforward, except that many donors are steering away from traditional scholarships designed for only high school seniors. Today it’s popular to design scholarships to benefit older students, students getting advanced degrees, for degrees and certificates where we have a workforce shortage in Grundy County, and for juniors/seniors who got scholarships to start college but have now run out of money and need to finish their degree. If you see a need, we can help you design a solution.
For those of you who are age 70-1/2 and older, you can “give while you live” via Qualified Charitable Distributions (QCDs) from your IRA. To avoid paying income tax on RMDs (Required Minimum Distributions), you can instruct your IRA administrator to send a QCD to your favorite charity. It’s this amount that you won’t pay income taxes on. The cap for 2026 QCDs is $111,000 per spouse – that’s a fantastic gift for your favorite charity and a huge tax savings for you!
If you are looking at supporting your favorite causes after your lifetime, there are a number of ways to do it. You can add provisions to your last will and testament to leave a percentage (or dollar amount) to your favorite charities. To do this, your attorney will want the legal name and EIN of that charity so there is no confusion when the time comes. If your attorney does not ask you about charitable planning, please bring it up.
If your heirs won’t need your money (or at least not all of it), you can change the beneficiary on your insurance, annuity, and other qualified accounts to be a charity. The administrator of that account can help you with a “change of beneficiary” form.
When planning charitable gifts via your last will and testament, please know that the Community Foundation of Grundy County accepts a number of non-cash assets, such as farmland, IRAs, and appreciated securities. Some of these non-cash assets are highly taxable to your heirs, so please consult your tax professional before you make your final decision on what to leave to whom.
Lastly, we have many donors setting up “shell funds” with a small amount now so that it is ready to be the recipient of their estate gifts. By setting up the fund now, we know the purpose of your fund and how you want us to use it in the community after your lifetime. It is the name of the fund and our EIN that you give to your attorney to include in your estate documents.
If I sound wishy-washy by using phrases like “give while you live or through your estate” or “there is no right or wrong way,” it is because that’s how flexible a community foundation is. Whatever your favorite cause, income, or estate plan, we can help you design a fund to fit both you and your favorite charity.
So do your kids a favor and get that last will and testament done in August! You can change it later, but have peace of mind now!
Julianne Buck is the Executive Director of the Community Foundation of Grundy County, located in the historic Coleman Hardware Building at 520 W. Illinois Avenue in Morris. You can contact her via phone at 815-941-0852 and [email protected].