By DANIEL MEYER

Properly implementing an estate plan is a crucial part of the retirement process, especially when deciding how you want to earmark money you eventually will leave behind.

So as estate planners and accountants sit down with clients and their families to help organize their financial lives, they know that developing an effective plan requires a clear understanding of how people want to gift their cash while getting the most bang for the buck. That is, sidestepping estate taxes in order to leave more money to the groups they want to assist.

"We are finding a lot of people are gifting securities and making sure they can avoid paying certain taxes," says Richard Hilliker, president of S.C. Parker & Co. in Williamsville, Western New York's oldest brokerage firm. "There are individuals who want to make a donation to their alma mater, a nonprofit organization or some other group, so that is something we work with them on when establishing their estate plan."

To shield money and other assets, many people place their funds in a trust that names beneficiaries and specifies in great detail how they want their assets distributed. This astute use of gifts and trusts can help get around estate taxes and leave more of the estate to charitable groups, some of which rely rather heavily on such gifts to survive and thrive in uncertain economic times.

Planned giving, also known as gift planning deferred, is a set of ways that an individual can leave money and other assets to a nonprofit organization upon his or her death. A rather complex program that can implement various financial instruments, it can be adapted to individual donor's needs. Many nonprofits enlist professional help in setting up planned-giving programs and base the hiring of some staff on their education level in planned-giving methods. For smaller nonprofits, simple bequest programs can be easily set up so that donors can designate their favorite cause as a beneficiary in their wills.

Those looking to update their personal finances and give a portion or all of their estate plan to charity are obviously keeping a close eye on ongoing talks in the nation's capital about the U.S. government's "fiscal cliff," which will affect everyone at the end of the year.

"Everyone is considering the fiscal cliff and what it is all going to mean with the laws that are set to change at midnight on Dec. 31," says Phil Durkin, vice president of Sage Investment Group, Williamsville. "There is a lot that could change with last year's temporary payroll tax cuts and the possible end of certain tax breaks for some businesses, as well as if charitable reductions will be capped or somehow changed or altered in any way, shape or form. The fallout from all of that is going to have to be measured once we get into 2013."

Many people who regularly contribute to their favorite charities, civic clubs and nonprofits want to continue the support by including those groups in their estate plans. Firmly identifying a portion of their estates for charity enables the donor to assist groups in carrying out their philanthropic mission. An attractive way to make charitable gifts is using a life insurance policy, since policy death benefits can supply charities with new resources to help meet an individual's goals. The fact that life insurance is a versatile financial tool with features that could potentially be advantageous in charitable giving has made this form of giving more popular in recent years.

"Life insurance is a terrific way to leverage one's assets and make a terrific contribution to a favorite charity," says Durkin.

For those looking to gift some of their assets to a charity, the clock is ticking for anyone who wants to see it show up on their 2012 tax return.

"Right now, for this year's tax returns, people really need to get all their ducks in a row and talk to the key people they regularly rely on for advice," he says. "Talk with your accountants, check in with your CPAs, have discussions with your financial experts and those who you trust to do your financial planning. Time is running out for this year, and these are not matters you want to rush."

The gifting of appreciated assets or stocks remains a popular method to make a charitable contribution, for the simple reason that you don't have to pay the capital gains tax - although that option may not be as attractive in the future.

"Again, back to the developments that will come from the fiscal cliff, we could see a situation where not having to pay capital gains tax on donations will go away," Durkin says. "There is plenty of concern that could occur."

What is the best way to determine if a specific organization should be identified as the recipient of your money?

"My advice would be to sit down and ask yourself what do you really care about," says Wayne Drescher, managing partner at Drescher & Malecki CPAs, Cheektowaga. "What you identify as a cause or belief that you are personally concerned about, and are passionate about and feel confident and comfortable about, can help an individual decide if and how they want to gift money as part of their estate plan."

Daniel Meyer is a freelance writer from Hamburg.