Philanthropy and Legacy Planning

You may wish to enhance your legacy through philanthropy and charitable giving. For donors and beneficiaries, there are many positives that accompany charitable gifts including tax advantages, the potential to make a difference and creating goodwill. While it’s possible to simply write a check to a certain organization, below are some other options potentially worth considering.

  • Donate stock directly to the charity. Stocks that have appreciated can be given directly to a charity through your account’s custodian, thereby avoiding the capital gains tax. The impact is that your gift is increased by 20% compared with selling the appreciated stocks and donating the cash.
  • Donor-advised funds (DAF). The IRS considers a DAF to be “a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it.” This allows the donor to make advisory decisions for the funds, which can have benefits like tax-free growth of a donation and supporting charities over time.
  • Charitable remainder trusts. These irrevocable trusts allow assets to be donated, while the individual retains the ability to draw income from them for life (or a set time period). Although they are more complex than some other methods of charitable gifting, the advantages can be significant when it comes to income and taxes.

The method of charitable giving can change the impact of your donation in a meaningful way. In addition to tax benefits, considerations like employer matching, timing and the overall impact on your comprehensive financial plan should factor into your gifting plans. You’ve worked hard to earn your wealth and we want to help you maximize the impact of your donations.