Wednesday, May 9, 2018

Now-and-Later Charitable Giving

“With markets up and a desire to make an impact strong, charitable giving is growing,” says Pamela Norley, President of Fidelity Charitable. There are four factors driving this generosity, she posits:
  • the strong stock market
  • increased awareness of issues (due to the 24/7 news cycle)
  • the desire to make an immediate difference by giving
  • the desire to minimize taxes
Carrie Schwab-Pomerantz, CFP®, President of Charles Schwab Foundation, lists four ways to incorporate charitable giving into your estate plan:

1. Include a contribution to a charity in your will
2. Designate a charity as beneficiary of an IRA
3. Create or participate in a split interest trust (you receive part of the benefit; the charity  receives  part of the benefit)
5. Use a donor-advised fund to give during your lifetime and beyond

Donor-advised funds are charitable investment accounts that individuals or families can use exclusively for the support of charities they care about. These funds can be opened with a minimum gift of $5,000 and have significantly lower administrative burden and costs than trusts.

Donor advised funds are ideal if you have not already committed a specific dollar amount to a charity in writing and you want to give substantially to more than one charity,” explains Deborah L. Meyer, CPA/PFS, CFP®. The way it works is that you donate assets or cash to the fund, but don’t decide how much is going to one or more charities until later on. Your charitable tax deduction applies now, but the distribution decisions can come later.

“You likely have a big heart and want to give to several different causes.  Yet there are so many valuable causes in the world.  Your contribution will go further if you select a few causes and give meaningfully to them,” Meyer suggests.

At Geyer Law, we generally recommend that our clients periodically review their estate plan, just to make sure nothing major has changed since their planning was originally drafted. One of the topics to discuss might be charitable planning. Are you in a different position when it comes to donating certain assets to charity than perhaps a year or two ago? Has your tax situation changed? Has “increased awareness of issues” made getting involved with the right charity seem more important? Have you learned of a charity that seems to be in better accord with your principles than the ones to which you’ve donated in the past?

Do you have a strong desire to make an impact? Let’s talk about now-and-later charitable giving!

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