{"id":103490,"date":"2022-11-07t12:00:43","date_gmt":"2022-11-07t17:00:43","guid":{"rendered":"\/\/www.g005e.com\/?p=103490"},"modified":"2024-08-07t23:10:18","modified_gmt":"2024-08-08t03:10:18","slug":"maximize-your-clients-charitable-giving","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/11\/07\/maximize-your-clients-charitable-giving\/","title":{"rendered":"maximize your client\u2019s charitable giving"},"content":{"rendered":"
<\/a>it\u2019s not all about tax implications.<\/strong><\/p>\n by anthony glomski<\/i><\/p>\n a growing number of successful people like your clients want to have a major positive impact in their communities and on the world at large. facilitating and increasing the effectiveness of charitable intent is very important to a burgeoning segment of high-net-worth investors.<\/p>\n more: <\/b>plan for your client to exit their business<\/a> | is your client\u2019s umbrella big enough?<\/a> | your client\u2019s instincts are wrong<\/a> | preserving wealth is a different mindset<\/a> this area of advanced planning is all about helping your client fulfill their philanthropic goals \u2013 and maximizing the effectiveness of any charitable intent they may have. it\u2019s very important to learn and use strategies that enable your client to give larger amounts than they would have been able to give otherwise. the actions involved in a charitable giving strategy include evaluating your client\u2019s charitable options and determining how those options fit in with their other goals, such as retirement income needs and wealth transfer goals. various trusts, funds, foundations and gifting methods \u2013 including private foundations, donor-advised funds, charitable remainder trusts and charitable lead trusts \u2013 are routinely used to ensure one\u2019s giving has the maximum positive impact. here is an example of utilizing effective charitable giving with tax efficiency.<\/p>\n like many of our clients, tom and tina are a very charitably inclined couple. in recent years, they have contributed $100,000 annually to various causes they support. as california residents, they are subject to taxes on more than 50 percent of what they earn. so, their philanthropic efforts have provided them with a nice tax break along with the satisfaction of supporting worthy people and organizations.<\/p>\n tom and tina\u2019s goal was to maintain their annual giving of $100,000 a year after having a liquidity event. they have a large chunk of appreciated stock in their company. by pushing the stock into a private foundation, they pay no taxes when the stock is sold. in addition, they get a write-off for the stock they contributed to the foundation. that\u2019s especially helpful for mitigating the tax bill when it coincides with a large liquidity event.<\/p>\n in this case, tom and tina accomplished four important goals:<\/p>\n there are also options that aren\u2019t entirely philanthropy-based, but that are still designed to support causes and interests about which people are passionate.<\/p>\n for example, your clients can mimic what facebook\u2019s mark zuckerberg (and ebay\u2019s pierre omidyar) did: set up a limited liability company (llc) for charitable giving. this approach comes without the tax deductions<\/strong> that are part of some of the other options noted above, but it allows for maximum flexibility.<\/p>\n think of the llc as a \u201cprivate foundation 2.0,\u201d in which the llc structure allows philanthropists to use their money just about any way they see fit \u2013 including as investments in for-profit companies that are trying to solve societal challenges. (in contrast, strictly charitable vehicles only allow donors to make grants to tax-exempt nonprofits.) warning:<\/strong> if you come across a charitable llc that drives a tax break, this is a major red flag.<\/strong> these structures are riddled with major issues and suggest that you may not be working with a consummate professional and could be putting your client at risk.<\/p>\n before going further down the charitable planning road with your clients, you should ask them basic questions like these:<\/p>\n i\u2019ve found that planned giving is not important to about one-fifth (20%) of successful entrepreneurs. but for the remaining four out of five (80%), you\u2019ll probably need to ask a deeper set of questions such as these:<\/p>\n these fundamental questions will help you drive philanthropic discussions with your client and better tailor solutions to get them what they want. there are numerous options for your charitably inclined clients that can drive tremendous income tax savings, estate tax savings and more. however, you absolutely do not<\/strong> want to lead this discussion with a product. charitable trusts come in a wide variety of flavors, but at the end of the day they are all products. your client doesn\u2019t need a product. your client needs a process<\/strong> to help them think through what\u2019s important to them, their spouse, their family, their legacy, etc.<\/p>\n sometimes, after going through all these questions with your client, you find that they\u2019re in that 20 percent for whom charitable giving is not important. that\u2019s okay. now you know philanthropy is not where you want to focus your efforts when putting together a comprehensive wealth management plan for your client.<\/p>\n all too often, after doing a deep discovery with a client or prospect, i see advisors continue to harp on the tax benefits of planned giving products. again, it\u2019s not about products. it\u2019s about understanding who you are working with; what\u2019s important to them and providing them with the best possible giving options. bottom line: just because you\u2019re a cpa doesn\u2019t mean you should always lead with tax. think of the tax implications last and focus first on your client\u2019s own unique needs and desires first.<\/strong><\/p>\n when it comes to giving, there are numerous structures and strategies you can recommend. but that\u2019s not what this is about. it\u2019s about understanding what\u2019s most important to your client.<\/p>\n","protected":false},"excerpt":{"rendered":" it\u2019s not all about tax implications.<\/strong><\/p>\n by anthony glomski<\/i><\/p>\n","protected":false},"author":3122,"featured_media":101492,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3120,3002,3139],"tags":[],"class_list":["post-103490","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pro-member-exclusive","category-special","category-wealth"],"acf":[],"yoast_head":"\n
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