Planned Giving has ALWAYS been an invaluable tool, for both the donor and the Charity
By Christopher Kelly
Articles are being published stating the benefits of planned giving strategies due to the impending changes to the tax code. Each statement written is absolutely true, but truer still is the fact that gift planning strategies have always offered value to both the donor and the charity, under almost all circumstances. While the tax benefits are undeniable, what I believe is often overlooked is the fact that there are numerous other reasons to use one. Structured correctly, gift planning strategies can add stability and flexibility to the overall goals of donors, (financial, tax, wealth-transfer, and charitable). It’s also true that a planned giving vehicle is the safest, easiest way to provide an impressive impact on your charities of choice (without using your wallet).
Focusing on those over-all planning goals, a comfortable strategy usually becomes clear. Often this includes a Charitable Reminder Trust that can provide;
- Investment Diversification. Some assets do not produce as desired, but selling the assets could generate a capital gains tax liability. Gifting that asset to a charitable trust transfers the ownership to the trust creating a shield from the liability on the sales transaction.
- Additional Tax benefits other include a charitable income tax deduction.
- The path to a charitable gift that makes the desired impact on the mission, but created comfortably from accumulated wealth rather than disposable income.
Those are the standard benefits that everyone discusses when changes to the tax code, or market conditions warrant a fresh look at planned giving. Rarely, if ever, do we ever talk about other motivators that make these planning tools so useful. Personal family dynamics or those situations where an income stream might be more beneficial than an inheritance.
- The next generation may or may not share your same morals, values and beliefs.
- Substance abuse concerns.
- In-law or marriage stability concerns.
- Or simply not to complicate the wealth/tax planning of the next generation.
So there are numerous reasons and opportunities to utilize a gift planning vehicle, (or even a combination) to your accomplish goals, when and how you decide. The secret is determining what you need personally and what you want to accomplish philanthropically. Once those goals are established, the planning begins. Don’t hesitate to ask questions, or begin the discussion with your professional advisors. Articles have the best of intentions, (just like this one!), but remember you are in the driver’s seat. If you have any questions or want to discuss why planned giving is always a valuable tool for planning, give me a call. I’m here to help. [Foundation Main Line – 734.462.4455]