Eco-Friendly Estate Planning: Leaving a Green Legacy

One of the many advantages of being proactive and setting up your estate plan is having the opportunity to make a plan that matches your values. Each plan is highly personal and unique to each person. For those who want to prioritize their environmental impact, an eco-friendly estate approach can blend traditional estate planning tools — powers of attorney, wills, trusts, charitable giving — with eco-conscious choices like green burial options, environmental philanthropy, and sustainable asset management.

Sustainable End-of-Life Options

Deciding on how to proceed with end-of-life options can be difficult. Each person must make their own choice about what feels right for themselves, their faith, and their loved ones. By creating a plan, you are easing the path for your loved ones, as they will know what your wishes are and can implement them. An estate planning attorney can draft instructions for your loved ones in your will and powers of attorney that will carry out your wishes.

Some people might be thinking about their ecological footprint in end-of-life decision-making and wish to avoid the use of toxic embalming chemicals or the use of materials that are not biodegradable. Along the same lines, some may be concerned about the carbon footprint of cremation.

One option is a green burial, where your body is returned to the earth naturally, as it is not treated with chemicals like formaldehyde and your body is placed in a biodegradable casket.

There are a few different options for where to be buried with a green burial. Some traditional cemeteries have special sections for such burials, while other cemeteries only allow green burials. Finally, conservation cemeteries offer these sorts of burials and also serve as a nature preserve. Fees associated with the burial fund the land conservation.

If cremation is more in line with someone’s end-of-life arrangements, water cremation (alkaline hydrolysis) can be an eco-friendlier alternative to traditional flame creation, as it uses less energy and produces fewer emissions than traditional cremation.

Including Environmental Causes in Your Estate Plan

If environmental causes are close to your heart, an estate planning attorney can help you structure your plan to support them for years to come.

One way to support environmental causes is to leave a specific gift in your will to an environmental nonprofit, land trust, or sustainability organization. You can leave either a specific dollar amount, a percentage of your probate estate, or the remainder of your probate estate to the organization(s).

Another easy way to support environmental causes is to designate a specific non-profit as a beneficiary of your retirement account or life insurance policy. You can either list them as a full or partial beneficiary of your account or policy. Using a retirement account for charitable giving can also have tax benefits. Withdrawals from inherited traditional 401(k)s and IRAs are taxable for individual beneficiaries, but not for charitable organizations. So, using retirement assets for charitable giving maximizes the use of other assets that don’t come with tax liabilities for your loved ones.

For giving over a longer term after your death, you could establish a donor-advised fund (DAF) during your lifetime to support eco-friendly organizations. A donor-advised fund is run by a public charity that is used exclusively for charitable giving. When you give money to set up such a fund, you get a tax deduction in the year the contribution is made, regardless of when the funds are distributed to a charity from the fund. In addition, you can leave assets through your will or through beneficiary designation to go to the DAF upon your death. You can name loved ones to serve as successor advisors upon your death to keep the giving going to the causes of your choice.

For people concerned about estate taxes, irrevocable charitable lead trusts or irrevocable charitable remainder trusts can be another way to ensure your wishes to support eco-friendly causes are carried out while receiving a tax benefit. Charitable lead trusts can be created either during your lifetime or through your will. Payments from the trust are made to a charity or charities for a certain period of time and then at the end of that period, the funds are distributed to non-charitable beneficiaries, often family members. Charitable remainder trusts pay income to you or another beneficiary for a certain period of time and distribute the remainder to a charity at the end of that time.

Guiding Your Investments

Many investors are now embracing ESG (Environmental, Social, and Governance) investing — choosing portfolios that support sustainability and responsible business practices.

Your investing plan can include screening out companies with poor environmental records, investing in renewable energy, green tech, or sustainable agriculture, and setting up trust management language that mandates environmentally conscious investing, if desired.

A Legacy That Lives On

If you take the time to think through and make a plan today, you have the opportunity to make choices about your legacy. With various options for supporting the environment through your estate plan, consulting with an estate planning attorney can help you determine the best approach for you. If you would like to put an estate plan in place, reach out for a consultation!