I’m going to let you in on a secret: Our executive director, Bill McCarthy, loves cake. He also has a background in estate planning. What do the two have in common? More than you might realize.

Creating an effective estate plan is like baking a cake: You have to know what kind of cake you want (not all of us love chocolate cake the way Bill does.) You must have the right ingredients prepared with the right timing and, finally, the icing.

Cakes require flour, sugar, eggs and butter. In a comprehensive estate plan, essential ingredients include your will, a durable power of attorney, a healthcare proxy and a living will. Like cakes, estates plans come in many flavors and sizes. Estate plan “flavors” are determined by the people and organizations you wish to provide for as well as your goals and values. Their “size” depends on the type and amount of assets you own and how you wish to disburse them.

Successful estate planning utilizes an array of ingredients, which can include trusts, beneficiary designations, and other special arrangements that provide for you and/or your spouse while living and facilitate the transfer assets after your death.  Properly mixed and timed, these “flavorings” can minimize income and estate taxes and maximize the amount you leave for your beneficiaries.

Now, let’s talk about Bill’s favorite part of the cake, the icing. The icing is where you get to provide for the charitable organization you’re passionate about, such as Catholic Charities. It’s your social capital – the portion of your estate that goes to help others. This icing is sweet because it can enable you to share your social capital while also maximizing what’s left for your family.

Arrangements such as charitable gift annuities and charitable remainder trusts can reduce capital gains and estate taxes while providing an income to you and/or those you love. Charitable beneficiary designations for retirement accounts and life insurance policies can help reduce the ordinary income and estate tax burden for your heirs. A bequest to charity in your will can reduce estate taxes. Every year, Catholic Charities receives essential support from generous individuals who have used these opportunities to help their families and our vital work.

As with baking a cake, it takes deciding the right recipe, taking the time to prepare it and the proper implementation to make your estate plan succeed. But you may be surprised to find that, once you get started, it’s a piece of cake!