Giving Tuesday, a day created to inspire people to take action on the Tuesday after Thanksgiving, shines a light on philanthropy and encourages you to maximize your impact on the causes and organizations most important to you.
In our work with clients we fine-tune individual gifting strategies, optimize charitable contributions, and select appropriate gifting vehicles. Our role is also to facilitate discussions that help define giving objectives and then build a philanthropic plan, especially where there are techniques that touch the investment and financial planning realms.
If giving back has been on your mind, we wanted to share the following tips and strategies that we find useful in our planning discussions with clients:
- Start with your goals in mind. It is important to first understand the ultimate plan for a gift: is it a one-time donation, part of a broader and ongoing gifting plan, or a step in the process of creating a charitable legacy? This framework helps determine the optimal strategies to use for gifting.
- Review your giving plans within a broader financial plan. A well thought out financial plan helps ensure that long-term financial needs will be met alongside the goals for gifting.
- Carefully select sources for gifts. We often suggest gifting appreciated investments or other property rather than cash, as this can help make the gift more cost effective and tax advantageous.
- Consider the best vehicle to achieve gifting goals. Donor-advised fund accounts, which allow for separate timing of the tax-deductible charitable gift from the eventual receipt of donations by selected charities and organizations, offer flexibility. A private foundation, on the other hand offers you more control over your distributions and investments. We encourage our clients to weigh the factors of privacy, ease of administration, cost, and control.
- Engage the next generation in charitable giving. Including younger family members in your philanthropic activities is a way to pass on personal values, share experiences, establish family traditions, and promote a spirit of community. Further, involving family members in philanthropy may be an important part of your overall wealth transfer plan.
- Incorporate giving into overall tax planning. End-of-year giving may help lower your tax bill, so we work with clients and their tax advisors to optimize the impact of their gift while also reducing the tax burden.
It’s important to note that every person’s and family’s situation is different, and these tax and gifting techniques require careful forethought and planning. That’s why we feel it’s important, as wealth advisors, to be available for planning discussions and to coordinate with your tax professional.
Whatever your objectives are around giving, our primary responsibility as your advisor is to ensure that each gifting choice is made in support of long-term goals and represents the most financially responsible strategies for each individual or family’s situation.
If you would like to discuss your charitable giving or tax-planning issues in more detail or have other year-end planning questions, please contact your Litman Gregory Advisor or email our team at email@example.com.
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