The Holiday Season is a Great Time to Revisit Planned Giving and Your Wealth Management Plan

Thomas Evans, CFP®, MS-PFP

Senior Advisor

JNBA Financial Advisors

thomas.evans@jnba.com

www.jnba.com

Topic: Wealth Management

Every year around the holidays we begin to think about the blessings that surround us and are thankful.  In turn, we also think about those who are in need and about the causes that are important to us and want to give back.  Giving back can never be a bad strategy.  However, planned giving is the strategy of aligning your philanthropic vision and values to a deliverable process.  A planned giving strategy can be immediate, life-long, and/or trans-generational.  It can incorporate gifts made during one’s life or as a legacy bequest.  The primary goal of planned giving is to enable a donor to enact a gifting strategy that provides both a personal and monetary benefit to the donor and selected organization.  In short, it allows us to know that the causes closest to us are being taken care of in whatever manner we choose while also understanding the benefits to our wealth management plan.  These benefits can be both monetary and personal.  The monetary benefits range from tax deductions to reduction of net worth to lower estate taxes.  The personal benefit is the ability to impact one’s community, important organization or cause.

In some cases, your strategy may find it is more advantageous to gift stock or real property instead of cash.  For most people, a cash donation is an after tax gift.  One tax effective method is to gift highly appreciated stock, mutual funds, or property.  By gifting the highly appreciated asset, the donor avoids realizing the capital gain for tax purposes yet receives the full fair market value of the asset as a charitable deduction, subject to income limitations.  In addition to cash or portfolio assets, time and experience are two valuable gifts people can donate to an organization.  Unlike a monetary donation, neither time nor experience can be utilized as a tax deduction.  However, donating your expertise to guide and advise an organization enhances not only your experience but directs the organization down the proper path.  Drawing on one’s work related and life experiences can help an organization avoid pitfalls and accelerate programs and projects to success.

This holiday season, when you are thinking about your own planned giving strategy, it is important to incorporate aspects of current giving, as well as future giving.  This may mean the use of donor advised accounts, family foundations, and trust planning.  The goal is to fully understand how your giving can benefit your existing and legacy goals.  Keep in mind that procrastination is a silent enemy.  Many individuals feel they want to make a difference but don’t know how to get started.  The first step is to commit to your philanthropic vision and values.  Discuss these concepts with your wealth manager.  Their knowledge will help in developing a strategy that aligns these visions and values through a comprehensive plan that maximizes the benefits of your gift to all parties.  Happy Holidays.