Planned Giving Basics for Millennial Parents
The first time someone told me I should consider planning my legacy giving in a will, I laughed it off.
“We’re not old enough for that!” I thought, “Planned giving is for retirees! Wills are for people with real money! My husband and I are barely adulting over here.”
However, the thought wouldn’t leave my mind, so I did some research to learn the basics of planned giving. Turns out, wills and estate planning are for anyone who wants certain things to be carried out after their death (yes, that seems obvious now that you say it, but hey—I was in denial about turning 30, much less planning for a financial future I could only just see). More importantly, a will also ensures that the money God has given us to manage continues to support people and organizations we’ve prayed about and that are within our sphere of influence. That influence can continue after we’ve gone through planned giving.
So, here are the planned giving basics I picked up during my research. Hopefully you find these answers as helpful as I did; if so, let us know in the comments below!
Figuring out planned giving is easier than choosing a restaurant together.
Planned Giving Basics
What is planned giving?
Planned giving, also called legacy giving, is when a person decides to give money to an organization over time, either as a monthly or yearly donor, or in a will or estate plan. For the purposes of this post, we’ll be focusing on estate planning and wills for planned giving.
How is planned giving related to estate planning?
You’re able to earmark assets (such as cash, homes, land, cars, and more) to go to specific people or organizations when you make a will or plan your estate. If you’re a millennial with a spouse and/or children, it’s absolutely time to have a will or an estate plan in place. If you don’t create a will, your assets will be divided among close relatives by a designee of the state in which you reside. (On a side note, a will also states what should happen to any minor children you have in the event of you and your spouse’s death. Without it, the state could place the children with any relative or in foster care, so if you have a preference, it’s best to put it into a will.)
Without a will, your assets will be distributed using an “all-purpose will” determined by the state. This will gives no thought to what your wishes might have been concerning who or what organizations you wanted to support after your death. That’s why planned giving and estate planning are so important.
Do I need to be rich to plan my estate or participate in planned giving?
This was a misunderstanding I started with—the assumption that without any assets to our names today, we cannot plan our estate or plan any legacy giving. However, I found these perspectives helpful:
- Life insurance counts as an asset when you’re considering planned giving. I’ve heard it recommended in multiple places that your insurance coverage should be enough that your family could live off the interest alone without touching the principal balance; consider planned giving in that equation, as well.
- Insurance gifts: There are a few types of planned giving options available using life insurance. First is a charitable rider, which is an insurance product add-on with an organization listed as the receiver. Second is listing an organization as a beneficiary of a percentage or amount of the life insurance if paid out. I wasn’t aware that this was an option, but in my mind this is a potentially simple way to plan legacy giving.
- Bequests: This is what it’s called when you list a specific asset that should go to a specific person or organization as a line item in your will. This form of planned giving makes sense if you’d like an account or asset to go to an organization directly.
So it seems that you don’t need to be “rich” to plan your giving—which is good news for young families like ours just starting out with kids, saving, investing, and living. Additionally, consider what Christian financial advisor Kelly Hahn has to say, “God will bless your giving, you will not want for anything. You do not need to have a high income to begin.” She also notes the promises found in Malachi 3:10:
“Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”
Fun fact: reading about tax law doubles as an excellent bedtime story.
How does planned giving impact my kids?
Kids are more likely to be generous if their parents give regularly. When my husband and I give regularly, be it money to church or time to organizations we care about, we’re using our actions to teach our children what generosity looks like. God has given us these resources to manage on His behalf, and we take this job as manager seriously.
Planned giving is no different. Not only can we have a direct impact on an organization when our planned gift is given, but we can also highlight to our children (and any future generations) what was important to us to support.
Next Steps for Planned Giving for Millennial Parents
- Determine your financial goals for today and for your future.
- Meet with a financial planner, estate planner, and/or estate attorney to assist.
- Communicate with your children, family, friends, charitable organizations, and anyone else listed in your will or estate plan.
- Update your plan as your life moves forward.
Planned giving allows you to make financial giving arrangements today that will be carried out in the future. As you consider your family’s financial goals, consider planned giving as a part of managing the resources God has provided.
Alicia Westphal is a Christian millennial, wife, and parent (both dog and human). A member at Trinity Lutheran Church in Waukesha, Wisconsin, she lives in Milwaukee and enjoys biking, reading, swimming, and spending time with her family. She also works as a digital marketer and loves volunteering for organizations whose missions she supports.
Disclaimer: This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor.