If you are prioritizing charitable giving in your estate plan, you may want to consider using something called a donor-advised fund (DAF) which has become more popular in recent years.

The value of DAF grants made to qualified charitable organizations increased 9% to $52.16 billion in 2022, and the number of accounts increased 2.9% to nearly 2 million according to the 2023 Donor-Advised Fund Report. Here are some of the basics to know about DAFs:

ABCs of DAFs

One way that a party may challenge a will during a will contest is to assert that undue influence was exerted over the decedent by the party who benefits from the disputed will. This raises the question: What is undue influence, and what proof is needed to demonstrate its presence?

Appellate courts have explained that in order for influence over a decedent to rise to the level of being considered undue influence, it has to be demonstrated that this influence destroyed the free agency and will of the decedent. This could involve mental, moral, and/or physical coercion. The influence must rise to a level of the testator accepting the domination and influence of another instead of following the dictates of his or her own mind and will. Weakness of mind as well as the desire of the testator being distorted by the imposition of a stronger dominating influence typically need to be shown to establish the existence of undue influence. That a party gave care and assistance to the testator is not in itself enough to be considered evidence of undue influence to destroy that individual’s free will. It needs to be demonstrated that the influence destroyed the free agency and will of the testator and that the will reflected the desires of the party which exerted the influence.

Undue influence is typically demonstrated through witness testimony (and potentially through relevant documents) which evidence that another party exercised mental, moral, or physical exertion, or all three, over the decedent. Any drastic changes in the decedent’s estate documents which directly benefit this party may also be proof of undue influence having been exercised over the decedent. The presentation of this testimony can be complex, and it is important that it be carefully planned before presenting this evidence to the court.

The beginning of a new year is an excellent time to take a new look at your current estate plan or to create one for the very first time. Here are some specific opportunities to consider in 2024:

Increased Estate, Gift, and Generation-Skipping Transfer Tax Exemptions

The estate, gift, and generation-skipping transfer tax exemptions increased to $13,610,000 per person in 2024, which is an additional $690,000 of tax exemption per person. For those who have previously made significant gifts, this provides even more gifting opportunities. These opportunities include things such as gifting portions of your family business to the next generation, transferring growth stock, or helping your child with a down payment on a house. Unless Congress takes action to maintain the exemption at its current level, the exemptions are currently expected to decrease to approximately $7 million per person as of January 1, 2026.

In the last post, I shared about how incapacity is defined and what may cause it. Here are ways incapacity relates to specific estate planning documents:

Power of Attorney

A power of attorney is a legal document that is used to appoint someone you trust to make decisions for you.

You’ll likely come across the term “incapacitated” while planning with an attorney for your future and addressing challenges that may come along with aging. In this post, I’ll write about how incapacity is defined as well as what can cause it, and next week I’ll write about what this concept means in relation to elder law and estate planning.

Incapacitated Definition

When someone is incapacitated, they are unable to make personal decisions or understand legal documents. A person who is incapacitated requires someone to make decisions on their behalf. Individuals such as an agent under a health care power of attorney or a guardian might be the ones to make decisions for a person who is incapacitated.

Using a trust as part of your estate plan can be beneficial in a number of ways, including maximizing tax code provisions to shield assets from gift and estate taxes, protecting assets from creditors or ex-spouses, or helping heirs be more responsible with their inheritance.

Revocable living trusts can be a vital part of your estate plan, but in order to help you, they can’t just be drafted and forgotten. A trust needs to be properly funded, including additions that are warranted. If you don’t move certain assets (such as cash, securities, real estate, artwork, and other types of property) into the trust before you pass away, the trust will not serve the purpose you intended in your estate plan.

If you are making a trust part of your estate plan and have already made the necessary arrangements, be sure to retitle assets in the name of the trust. This may be easier said than done, and depending on the type of asset, specific requirements will need to be met. Simply transferring assets to a trust is not enough. A transfer of ownership of real estate, for example, typically requires you to jump through extra hoops.

In the last post, I shared 9 questions you can ask yourself to begin creating your estate plan. After you have answered these questions, here are next steps you can take to get your estate plan in writing:

The Next Step

Although the specific documents you use to create your estate plan may vary depending upon your needs and your particular situation, some of the basic documents that most people will want to create are a financial power of attorney, an advance directive, and a will.

People often start the New Year with goals for themselves for the year such as improving their health or writing a book. Making a last will and testament or other estate planning documents is also a common goal at the start of the year. How can you begin this process?

To begin, it’s important to understand what estate planning does as well as the ways it helps you and your loved ones. Estate planning is a way to protect you and those closest to you during your lifetime as well as after your death. You can be in control of much of what happens and who will be in charge of certain things if you become incapacitated or after you pass away. Expressing your wishes in legal documents can prevent conflicts between loved ones and can prevent unnecessary loss of time and money.

Here are nine questions to answer to formulate your estate plan:

Talking to your children about your estate plan

A key part of the smooth implementation of your estate plan is having a conversation with your children where you are open and transparent about your plan. Having this conversation with them can help prevent future conflicts and can give them more confidence to know what to do when needed. Although it might be much easier said than done, avoiding these difficult conversations or keeping your estate plan a secret can have major repercussions.

Here are some important topics to cover with your children when talking about your estate plan:

In the last post, I began writing about including care for your pet as part of your estate plan. One option for doing this is to establish a pet trust.

A pet trust is a type of trust established for the care of one or more animals that outlive their owners. Pet trusts are recognized in all fifty states, especially for the care of animals with longer life expectancies, such as turtles or birds, as well as for animals that are more expensive to care for.

Pet trusts will remain in effect for the duration of the pet’s life. If there are multiple pets, the pet trust will remain in effect until the passing of the last surviving pet. When establishing the trust, the owner has a number of important decisions to make, and the trust is able to be fully customized.