Key Considerations for Creating a Charitable Legacy
Posted by Amanda Ornowski on July 17, 2025
For many people, charitable giving is more than a financial decision, it’s a reflection of personal values, a way to give back, and a means of leaving a legacy. If you’re thinking about how to incorporate philanthropy into your estate plan, you’re not alone. More individuals and families are exploring how to make a meaningful impact through planned giving.
One of the first decisions you’ll face is when to give: during your lifetime or through your estate after death. Both options offer unique benefits, and the right choice depends on your goals, financial situation, and the legacy you want to leave behind.
Option 1: Giving During Your Lifetime
Making charitable gifts while you’re alive allows you to see the results of your generosity in real time. Whether it’s funding a scholarship, supporting a local shelter, or helping a nonprofit expand its services, lifetime giving can be deeply rewarding.
Benefits of Lifetime Giving
- Immediate tax advantages: You may qualify for an income tax deduction in the year you make the gift, subject to IRS limits.
- Estate reduction: The value of the gift — and any future appreciation — is removed from your taxable estate.
- Personal involvement: You can engage directly with the organizations you support, shaping how your gift is used and building relationships with their leadership.
When Lifetime Giving Makes Sense
- You have sufficient assets to meet your own needs and still give generously.
- You want to experience the impact of your philanthropy.
- You’re looking for current-year tax deductions or want to reduce your estate’s future tax burden.
Option 2: Leaving a Charitable Bequest
If you’re not ready to part with assets during your lifetime, you can still make a powerful impact by including charitable gifts in your will or trust. These bequests can take many forms — a specific dollar amount, a percentage of your estate, or even the remainder after other distributions are made.
Benefits of Charitable Bequests
- Estate tax deduction: Your estate may qualify for an unlimited charitable deduction, potentially reducing or eliminating estate taxes.
- Flexibility: You retain full control of your assets during your lifetime.
- Legacy building: Your gift can support long-term initiatives or endowments that carry your name and values forward.
Key Considerations
To ensure your charitable bequest qualifies for tax benefits and is carried out as intended:
- Clearly name the charitable organization in your will.
- Specify the amount, asset, or percentage you wish to give.
- Avoid giving your executor or heirs discretion over charitable distributions, as this can disqualify the estate from tax deductions.
- Name a backup charity in case your chosen organization no longer exists or loses its tax-exempt status.
Understanding the Tax Landscape
As of 2025, the federal estate tax exemption is $13.99 million. Starting in 2026, under the One, Big, Beautiful Bill Act, the exemption will increase to $15 million and be adjusted annually for inflation. If your estate is likely to exceed these thresholds, charitable giving can be a strategic way to reduce your estate’s tax liability while supporting causes you care about.
Making the Right Choice for You
There’s no one-size-fits-all answer when it comes to charitable giving. Some people choose to give both during life and through their estate, creating a blended approach that maximizes impact and flexibility. Others focus on one method based on their financial goals, family needs, and philanthropic vision.
The most important step is to ensure your intentions are clearly documented and legally sound. A well-crafted estate plan not only protects your legacy but also ensures your generosity benefits the organizations and communities you care about most.
Final Thoughts
Whether you choose to give now, later, or both, your charitable legacy can be a powerful force for good. With thoughtful planning and the right guidance, you can make a lasting difference, one that reflects your values and inspires others for generations to come.
Download a two-page summary of Effective OBBB Dates for Individual Taxpayers here.
for more information
Amanda joined the Lumsden team in 2021 and has over 15 years of experience in the accounting industry. Her background spans both public accounting and corporate tax, allowing her to offer a well-rounded perspective on tax and financial planning. Amanda works closely with high-net-worth individuals and multi-generational families, delivering tailored, comprehensive solutions to address their tax and financial needs. She specializes in business and individual tax consulting, with a focus on professional services, retail and manufacturing industries, as well as investment partnerships and family foundations.