Advanced Charitable Giving Strategies for the Affluent | Charitable Giving Insights | On Demand Webinar

Download our complimentary guidebooks, checklists, and other useful financial resources at savantwealth.com/guides.

Well, hello, everyone. We’re glad that you can join us for today’s webinar. , Today we’re talking about advanced charitable giving strategies for the affluent. My name is Jeff Lewis. I’m a financial advisor here at Savant Wealth Management. And I’m joined by my colleague, Miriam, who’s down in the Atlanta. Miriam, do you wanna say hello?

Hi, everyone. Miriam Falaki coming out of the Atlanta office, and I’m really excited to dive into this topic today.

Good. Thank you, Miriam. , We’ve got a lot of things that we’ll cover today. , Here’s kind of a preliminary agenda. , As part of our call today, , there is a Q&A, , chat box within the Zoom function. So if you have questions throughout the presentation, please put your questions in the Q&A chat box and we’ll be sure to answer those at the end of our sessions. So, , feel free whenever the time’s right throughout the presentation, go ahead and put your question in there. We’ll put that in the question bank and we’ll address as many of those as we can before the presentation comes to an end, , here, , at the end. So, , well, but first I wanna just start kind of talking through what we expect to cover today. So anytime, you know, we’re talking about charitable gifting, , there’s always the strategy portion, you know, what, you know, what’s the most tax efficient way I should be gifting, right?

, But I think first and foremost, if, if we miss the most important part, if we miss the vision or for why, , or for how you want to gift, if we miss that piece of the conversation and we don’t have that conversation first, then I, I would argue the strategies don’t really mean as much and sometimes they’re not aligned with the things that are most important to you when you’re thinking about charitable gifting. So we’re gonna be just kinda talking about the vision for charitable giving, why we do charitable gifting, talking about estate and legacy planning as a whole. And then the second half of the presentation, Miriam’s gonna cover kind of the strategies as it relates to tax efficient gifting, family philanthropy, , and then we’ll close out with just kinda next steps and wrap up with our Q&A sessions. So, , we’ll go ahead, we’ll just dive right in here, , into our agenda and, , work from there.

So defining your charitable vision, , I kinda always start with the why, , right? So like why do you want to give to charity? What about giving to charity is important to you? , And typically it’s gonna be different for everybody. You know, everybody’s motivit – motivated by different external or internal factors of why they give to certain charities. But three of the most common that we hear are volunteering, educating, advocating, right? And those three all have, , differences, right? So volunteer, you know, people sometimes dedicate their time as opposed to a monetary gift. , Others choose, you know, to, from the perspective of educating their s – themselves before they give to the charity, but then as they’re giving to that charity, they’re continuing to learn about the mission and the passion that the cause that they’re supporting. , And then the third obviously being advocating by speaking, , whether it’s with, you know, elected officials, charities of their choice that are close to home for them.

, I think we’ve all could probably, you know, look internally and retrospectively, and we probably all know somebody who has been, , in some ways either been, you know, benefited by the services of a charity that they provide, , or maybe there was a charity that started in memory of a lost loved one for a particular cause. And so when we think about giving and we think about the why, the why is almost, if not more important, and I would argue it is more important, , than how you go about the tax efficient way of giving. ‘Cause If, if you don’t s- solve for the why and why it’s important to you, well then you’re just kind of giving for a tax benefit and, and sometimes that’s not always the best reason to give. , I always say at the end of the day, they’re giving you a deduction, right?

So it’s not like you’re getting money back by giving to the charity. So it really should be motivated by some of those internal factors that, , more speak to you about your values, the things that are most important to you. Does it give you motivation, , and energy for the gift that you’re making? Those tend to be the reasons why you think about start making gifts. And then secondary to that is obviously looping in what’s the most tax efficient ways to gift.

Building on that, , a lot, you know, a lot of the questions we sometimes get, Miriam, I’m sure, , you would agree with this, is, is it better to give now or is it better to gift later? And, , there’s no right or wrong answer to that. , It’s gonna be dependent on kind of what you envision for your legacy during either your life or at your passing. , Obviously some of the benefits to giving now is you’re able to see those dollars go to work and you can kind of see how the charity is using those dollars to support the mission. , However, other people, you know, you know, view it as, “Hey, you know what? I’m gonna give later because it gives me a lot of peace of mind knowing that the money that I worked and saved so hard for is gonna be there for me if I need it for long-term care expenses or caring for a spouse.

And it gives me a lot of peace of mind and comfort knowing that the money is there and I will end up leaving it as a bequest to the charity upon my death.” And so, you know, there’s that give now versus give later, and I think each one resonates with different people depending on what their ultimate goals are. , But when I think about, you know, is it giving now versus giving later, well, that definitely impacts the strategy you use in terms of how you leave monies to charity. , And we’ll cover some of that in more detail here throughout our presentation today.

, So thinking about estate and legacy planning as a whole, , I, I wanna touch on a couple of, I think, misnomers that have been put out there. , There’s always talk about the death tax, right? And this was really big a couple years ago during, , the last political cycle, people were talking about the death tax. Well, what is the death tax? When people talk about the death tax, what they’re referring to is an estate tax. So at the end of the year life, the government looks at the value of your estate and they determine based on thresholds set by either the federal government or each individual state whether you have a taxable estate or not. And if your estate value is higher than an amount that’s set by the federal government, which right now is about $15 million per person, or if you’re above the state level thresholds, they will deem you to have what is called a taxable estate.

Many states actually don’t assess an estate tax, a state level estate tax. And most states also don’t assess an inheritance tax for the people who are inheriting the money. There’s actually only one of 50 states here in the United S – United States that has both. , And so lucky for the people who are on the call, if you happen to be a resident of Maryland, , you actually live in a state that has both an estate tax and an inheritance tax. Why is this important to know? Because it helps inform you on some of the s – you know, strategies of whether you give during your life or whether you give at the end and how you make those gifts from your estate, particularly at the end. , If you’re leaving bequests at the end of life, you wanna make sure that your documents have the right language in them, , to ensure that those gifts that you ultimately want to leave make it in the hands of the right charities or the right people, whatever it may be.

, So understanding the state that you’re in and how it impacts you, , is cr – incredibly important. Now, obviously, the federal estate tax applies to everyone in the United States. However, , right now, the federal estate tax is $15 million per person or 30 million in total. , And that is what also has a portability feature or a portability election. , So if one spouse dies and they don’t use all 15 million of their federal estate tax exemption, the surviving spouse can actually file a tax return to port over the unused exemption that was not used by their spouse. So there’s, there’s different ways to make sure you take advantage of that. , But for right now, that’s kind of where we stand overall in our country from a estate and inheritance tax standpoint.

So where, where do we start, right? So I always say, you know, you gotta start with the outcome that you’re trying to ultimately accomplish, right? So before choosing a technique, before choosing a donor-advised fund or a charitable trust, and Miriam’s gonna talk about these in a little bit, before you get into that, what’s the outcome that you’re actually trying to solve? So are you trying to support family? Are you trying to create a lasting impact, whether that be for a charity be – charity or for your family? , Or do you value flexibility? Or maybe a little bit of all three, right? , There’s no right or wrong answer when it comes to defining what you have for your vision and your passion as it relates to the legacy that you want to live. And so I think the conversation starts with, you know, if we’re sitting here five years from now, , what do you want this to look like?

You know, if you’re asking yourselves the questions of, how do I, how do I come up with a charitable or estate plan that aligns with the values and visions that I’m trying to accomplish, where do you ultimately, what do you ultimately want it to look like at the end of year five or the end of year 10, right? And, and start thinking about that. And then from there, all of the different techniques can feed into that. , I think it’s here at the bottom of the screen, but the best estate plans balance people, purpose, and practical flexibility, right? You don’t wanna lose flexibility and hamstring either heirs or charities based on the rules that you set forth in your plan today. So you wanna make sure you allow for enough flexibility if rules or laws change in the future, , but you wanna align it with what’s most important to you today.

So thinking about choosing the right asset for the right recipient, right? And that’s kinda just a fancy way of saying, you know, which accounts should I leave to people and which accounts should I leave to maybe charitable organizations? , So for, you know, many people who, you know, work and, , save to a 401 or, , maybe a cash balance or defined benefit pension plan, and they’ve accrued a large balance over the years, and now they’re at a point where the IRA just continues to grow and grow and grow because they cannot spend it, the IRA is a great asset to leave to charity as part of an estate plan. , Why is that? Because if you leave your IRA directly to a 501 the charity’s not paying taxes on it upon your death. Whereas if you leave an IRA or a pre-tax retirement account to your heirs, your heirs have a 10-year window to distribute that money, and every dollar that they take out is taxable income to them.

So when you think about, okay, if I’ve got an IRA, a Roth IRA, and a trust account, you have three different buckets of money that are taxed differently. So you wanna be more proactively thinking about, “Okay, within my estate plan, if I wanna leave X amount to a charity, can I just carve out a certain amount of my IRA and kinda earmark that for the charity in my estate plan?” It’s certainly an option, right? It’s not necessarily to say that’s what you should do, but it’s certainly an option. , The best assets to leave towards heirs to actual people, human beings, whether it’s kids, grandkids, cousins, brothers, sisters, whatever it may be, , those tend to be, , assets that have appreciated, but they’re held in what’s called a tr – like a taxable brokerage account, potentially real estate, because those types of assets receive what is called a step-up in basis upon your passing.

So when you pass, , all of those assets that you hold that have large capital gains because those assets have appreciated over time, receive what’s called a step-up in basis, and that ca- capital gain impact goes away at your death, right? So in some ways, if you say, “Hey, I want my b, my, my son and my daughter to inherit my real estate properties, my joint, my individual brokerage account, and my, and my trust account,” all of those accounts receive a step-up in basis when you pass, and those are essentially a tax-free inheritance to your kids, assuming you don’t live in one of the few states that has an inheritance tax. So when we talk about choosing the right assets for the right recipients, this is what we’re talking about. , Obviously, you know, speaking from the perspective of having affluent charitable gifting strategies and, , affluent estate plans, you know, life insurance can be a big piece of that, mainly from a liquidity perspective, right?

So if you’re in a position where you have a large estate, , maybe a good portion of your estate is an illiquid assets that will be hard to sell, whether it’s, you know, you know, illiquid investment funds, real estate, whatever it may be, having a life insurance component that provides immediate liquidity upon your death to help either pay, you know, estate tax, inheritance tax, you know, wrapping up your estate and paying the funeral, you know, funeral home, all of these different things, life insurance plays a key role in that, , and it can also play a key role in just providing liquidity to the beneficiaries who are inheriting the money. There’s a lot of expenses, a lot of things that can come up, , during kind of an estate settlement process, and so having some cash on hand in the estate already can be really helpful, and quite honestly, relieves a lot of stress for those who are in charge, , upon your passing.

So thinking about, you know, building on the concept of, okay, we covered, you know, the vision, you know, we covered why, you know, what’s important, what are the practical ways to leave gifts to charity? And I think there’s three of the most common ones that we see, one being a bequest, right? So at the end of your life, you name a charity in your will or your trust and you say, “Hey, I wanna leave a percentage of my estate to 10 charities,” right? , That’s one option. , The other option is by simple beneficiary designation. So, , the scenario I was talking about earlier, if you have pre-tax, tax-deferred retirement, , accounts, typically, those, , can be, just be passed along via beneficiary designation. So if you had a charity that you’re really passionate about, you’ve supported it both with monetary gifts, but also your time, and you wanna leave a large, , gift to that charity upon your passing, well, you could technically just make the charity, the, the beneficiary of that IRA account, the charity gets all of the money in there, they don’t have to pay any income taxes on it, and then you leave the more tax-efficient assets for your heirs, right?

So your Roth, your Roth accounts, , the individual brokerage accounts, the trust accounts, real estate, the things that receive a step-up in basis. , So those are all the things, , to be thinking about as it relates to the beneficiary designation. , The other one, and this has become more popular probably in the last 10 to 15 years, and Miriam’s gonna cover this here shortly, , a charitable account successor. So I won’t steal, Miriam, your thunder, but, , there’s a concept called a donor-advised fund, , you can put money in it, but having somebody take over that fund and name them as the successor to continue the grant-making process, to involve your family in this larger legacy plan that you had envisioned for yourself, having somebody appointed to do that before you pass away can continue on the legacy of the charitable plan that you put in place during your life, and then it obviously can continue on beyond your, , beyond your passing.

And so when I think about practical ways to give to charity, these are the three most common we see with the, the more increasingly, , popular one amongst more affluent investors being that charitable account successor because they’re able to carry on the legacy that you originally put in place.

So kind of bringing all of this together and kind of wrapping up this section, thinking about bringing all of it together within the legacy plan, right? So first is, let’s clarify what are, what’s the outcome you’re trying to solve, or what’s the outcome you’re trying to get to, right? It starts there. What’s important? Why is it important? , What does this look like five to 10 years from now? From there, you can put together, kind of start designing, you know, different strategies, right, whether it’s gonna be a donor-advised fund, a bequest, an IRA beneficiary designation, , family foundations, all of those different things. , From there, you coordinate, and I think the most important one is bullet point number four, communicate. Communicate to your family why this is important to you, what the vision you see, not only during your life today, but upon your passing, what you want this to look like, communicate the why.

The why is incredibly important for your beneficiaries or for your heirs to understand, like, “Hey, I’m not just giving this money for the tax benefit. I am giving this money because this organization helped me or helped your dad or helped your grandpa or helped your friend, whoever it may be, they helped fund their cancer treatments, or they helped fund different diagnosis treatments they had to go through when they were having a serious illness,” whatever it may be, explain the why. Without the why, it’s hard for the next generation or your heirs to understand why this is important, so that is what I would argue is the most important thing. And then obviously, while you’re still alive, the last one is review it, right? Because every three to five years, laws change, income tax laws change, estate tax laws change, make sure you stay in front of it, because sometimes there’s small changes that take place in the tax code that don’t always get published, and so make sure you’re working with a qualified professional who can kind of help you through this and make sure that your estate plan stays up to date with current law.

So that kind of wraps up, you know, what I was planning on covering. , Miriam, I’m gonna turn it over to you now to kinda talk about the tax-efficient giving strategies, , and I know you’ve got some other bullet points as well that you plan to go through. So take it away from here, Miriam.

Yeah. Thanks, Jeff. So Jeff just covered a lot of what happens, you know, at death, and I’m gonna talk a little bit about what you can do, you know, while you’re still living to give to charity. And tax-efficient giving can sound complicated, but most conversations begin with a few fairly simple questions. What asset does the o – donor own? Is it, is this an unusually high income year? How old is the donor? Does the family want to make one gift today or create a giving process that continues over time? And the strategy should come after those questions, not before. I’m gonna walk through the several options here, but no family needs to use all of them. The goal is to identify the strategy or a combination of strategies that best supports the family’s charitable goals and overall financial plan. So this slide is our roadmap, right?

If someone owns a highly appreciated asset, we may consider giving the asset rather than cash. If someone is having an unusually high income year, perhaps because of a business sale, a large bonus, or another taxable event, we may consider bunching several of these strategies or using a donor-advised fund. I’m gonna go over each of these in a minute. And then if someone is at least age 70 and a half and has an IRA, a qualified charitable distribution may be helpful. And if a family wants both income and charitable legacy, a charitable gift annuity or a charitable trust may be worth exploring. The best strategy often combines the three, three things, right? The right asset, the right year, and the right charitable vehicle. To make these strategies easier to follow, imagine a couple I will call David and Susan. This is an illustrative example, not an actual client, and they are ac – charitably inclined, but like many families, their wealth is spread across different types of accounts.

They have appreciated stock, retirement assets, and a year coming up in which their income may be unusually high. As we move through the next few slides, we’ll see that the best answer may be different for each asset. So in this next slide, the first strategy is one of the most useful, and in my experience, one of the most frequently overlooked, giving appreciated securities. So I’m gonna return to David and Susan. Suppose they normally give $25,000 each year. They could write a $25,000 check, but imagine that Susan also owns stock purchased many years ago for $5,000 that is now worth 25,000. If she sells the stock first, she realizes the gain. If instead she transfers the shares directly to a qualified charity or to a donor-advised fund that accepts them, she can avoid realizing the capital gain and also qualify for a charitable deduction subject to the applicable rules.

The charity can then keep or sell the security without incurring any gains because of their tax-exempt status. The order of operations is important because the asset generally needs to be transferred before it’s sold. This can be especially helpful when someone wants to support charity while also reducing a concentrated or low basis investment position. It’s a good example of how the asset used for the gift can matter almost as much as the size of the gifts. In other words, the question is not only how much do I wanna give, it’s also what do I already own that may be the smartest asset to give? So next, I’m gonna talk about bunching. Bunching doesn’t necessarily change how much a family ultimately gives to charity. It changes the timing of the charitable contribution for tax purposes. So we’re gonna go back to David and Susan who normally give about 25,000 each year.

Instead of contributing 25,000 in each of the next three years, they may contribute 75,000 in one year to create a larger itemized deduction in that contribution year. If they contribute the 75,000 to a donor-advised fund, the fund can still make grants to their favorite organizations over the same three-year period. From the charity’s perspective, the support can remain consistent, but from the family’s planning perspective, the charitable deduction is concentrated in the year of the contribution. So this can be particularly useful in a year when income is higher than usual, , but that chart is intentionally illustrative. The right amount depends on income, filing status, other deductions, the assets being donated and the tax law applicable to that particular year. I sometimes describe this as stocking the charitable pantry. You put several years of intended giving into the pantry today, but you still take out only for what you need for each year’s grants.

These can be set up at many different custodians, and it can be like in this case, the Susan and David Donor Advised Fund. Once you give it, it’s, it’s irrevocable. You can no longer take it out. It has to be given to specific charities. So in the next slide, I just wanna have another illustration on how the donor, what it looks like once they contribute, what can be done once it’s in there, and then how you can set up the donation going forward. So it, it serves as the central hub for a family’s charitable giving. The donor contributes cash or other ac- ac- accepted assets. Generally, it makes sense to donate appreciated, highly appreciated securities. The assets may remain invested, and the donor can recommend grants to eligible charities over time. The separation between the timing of the contribution and the timing of the grants is what makes a donor-advised fund so useful.

For David and Susan, this could mean contributing appreciated stock in that high income year, then continuing to support their church, local food pantry, or educational organizations on their regular schedule. You don’t have to select every charity on the day you fund the account. That can be helpful during a really busy or emotional financial event, such as selling a business, , or some real estate that they inherited. The family can complete the contribution and charitable tax planning in the appropriate year, then take more time to determine which organizations it wants to support. A donor-advised fund may also offer an easy way to include children or grandchildren. Family members might each research an organization and bring a grant recommendation to an annual family conversation. But for many families, this provides flexibility and simplicity without administrative responsibilities of operating a private foundation. It can also simplify record keeping.

Instead of tracking separate charitable receipts throughout the year, the family has documentation for the contribution to the sponsoring organization and a central place from which it recommends grants. One important boundary is, I mentioned this earlier, that contribution is irrevocable. The sponsoring organization or the custodian has control of the assets and grants must be made to eligible charitable organizations. It has to be a 501. This is not a personal account and cannot be used to make gifts to families or friends. A donor-advised fund is often useful when someone has appreciated assets, or like I said, an unusually high income year. But for an older IRA owner, there may be a more direct strategy that Jeff touched on earlier, and that would be the, , QCD or a qualified charitable distribution. This allows an individ – an eligible IRA owner to direct funds from an IRA straight to the charity.

The person must be at least age 70 and a half on the date of the distribution, and the money must move directly from the IRA to the charity. A QCD can count toward a required minimum distribution, but instead of being reported as an atomized charitable deduction, the qualified amount is excluded from income. That means it may be useful even for an individual who takes the standard deduction. For 2026, the max amount you can donate from an IRA is 111,000 per eligible individual. The practical issue I would underline is form 1099R that gets, , distributed after the tax year does not identify a distribution as a QCD. The donor should keep the acknowledgement from the charity and make sure their CPA or tax preparer, if they do their own taxes, to identify that it’s actually qualifies as a QCD. So I’ll go back to Susan. She.

Her mother is 76. She gives 10,000 annually to several charities and also takes an RMD. Rather than taking the full distribution into her bank account and then writing checks, she may be able to direct the 10,000 directly from her IRA straight to those charities. She’s accomplished the same charitable goal, but through an asset and process that may be more tax efficient. The charity, again, does not care where the donation comes from because they are tax event, , tax exempt. <Laugh> So for. So far, these strategies have focused mainly on making a charitable gift. , But what if the donor wants to create an income stream? That’s when we tap into the charitable gift annuities and charitable trust. So a charitable gift annuity is generally the simpler of the two. The donor makes an irrevocable gift to one charity, and the charity agrees to make fixed payments for life.

At the end of the payment period, the remaining value supports that charity. On the right, a charitable trust offers more flexibility, but it also involves considerably more complexi- complexity. With a charitable remainder trust, one or more non-charitable beneficiaries receives payments first, and the remaining assets eventually pass to charity. With the charitable lead trust, the order is reversed. Charity receives payment first, and the remaining assets later passed to a family or other non-charitable beneficiary. A useful way to remember the distinction is to ask who receives the first or lead stream of the payments. These strategies may be appropriate when a donor is considering a larger gift, has appreciated assets, wants an income stream, or needs a more customized estate planning structure. They require careful coordination among the financial advisor, estate planning attorney, tax professional, trustee, and charity. So in this example, we can consider a widow who owns appreciated stock.

She wants to make a meaningful gift to the university that provided her scholarship, but she’s committed to the gift. She’s just not comfortable giving up all economic benefit from that asset today. A charitable gift annuity or charitable remainder trust might allow her to support the university while retaining a payment stream. The right choice would depend on the amount, the asset, her income needs, and how much complexity she’s willing to accept. The most sophisticated solution is not automatically the best. Complexity should earn its place in the plan. So just to kind of tie in all the different strategies, we just wanna make sure we ask the right questions when we’re try – when we’re planning out how we wanna do our tax efficient giving. First, do you own appreciated securities? If so, consider whether gifting the asset itself may be more efficient than giving cash. Second, is this an unusually high income year?

If so, explore whether bunching, a donor advised fund contribution or another strategy fits the family’s plans. Third, are you at least age 70 and a half or older and do you have an IRA? If so, evaluate a qualified charitable distribution. Fourth, do you anticipate having an estate tax issue? Do you want both an income stream and a charitable legacy? If so, a gift annuity or charitable trust may be worth discussing. Notice what we did not ask. Which product should we use? We started with the donor’s goals, assets, age, income, and desired level of flexibility. The strategy follows the situation, not the other way around. So we spent the last several slides discussing assets, deduction, charitable vehicles, and those tools matter, but they’re not, they’re, they are only part of the story. Ultimately, philanthropy is about people, the people a family wants to help, the experiences that shape the family’s values, and the generations the family hopes to involve.

But now I’d like to move from the mechanics and of giving to the meaning of giving. And Jeff kind of talked about this earlier. You want to make sure that it’s part of the family philanthropy. It’s not simply about selecting the charities or writing the checks. For some families, philanthropy creates a bridge, a bridge across generations. It gives parents and grandparents a natural way to explain which experience shaped them while giving children and grandchildren a meaningful voice in the family’s future. And the family doesn’t have to agree on every organization or every gift. Complete agreement is not necessarily the goal, but a better goal may be to develop a thoughtful process for listening, learning, making decis- decisions and evaluating whether the family’s giving is accomplished what it intended. It’s about more than donating money. It’s a way for families to express their shared values and create la – a lasting impact that reflects what matters most.

Most of you might have, , have heard of Patagonia and they are a powerful example of this idea in action. The founder and his family have long been passionate about protecting the environment, and in 2022, they restructured the ownership of their company so that the future profits would help the environmental crisis. Rather than selling the business or passing it on solely as a financial asset, the family used it as a vehicle to advance their mission of protecting the planet by aligning their wealth, business, and values around a, a common purpose. That family demonstrated how philanthropy c- can become a meaningful legacy that extends far beyond one generation. Now, this is a complicated example. Most families will never create something that large or complex, but the underlying question is universal. How do we structure wealth so that the values behind it continue? So one challenge with family philanthropy is moving from the general desire to do good to a process everyone understands.

This framework gives families a place to start. First, discover. Ask each person what matters to them, which experience have shaped the way they think about generosity. Second, prioritize. A family cannot solve every problem. So where does it most want to focus? Third, structure. Should the family give directly, use a donor-advised fund, establish a foundation or include charitable planning in its estate plan? And fourth, participate. Who’s gonna research the organizations, recommend grants, volunteer, visit a nonprofit and report back to the family? Finally, reflect. What did we learn? Did the gift have the impact we expected? Should we continue, deepen the commitment or change direction? The framework is not meant to make giving feel bureaucratic. It’s meant to ensure that everyone understands how ideas become action. I see this in my own volunteer work with an organization that I’m involved in, and writing a check is meaningful, but making things together creates a different kind of connection.

Children and a- and adults can see exactly what they’re doing, why it matters, and how their individual contribution becomes part of something larger. That experience often leads to better family conversations than simply telling a child our family believes in giving back. So this last slide I’m gonna talk about captures the progression from values to impact to legacy. Values answers the question, what does our family want to stand for? Impact asks which people, communities or issues matter most to us and what do we hope our giving accomplishes? And legacy asks, what do we hope our future generations carry forward? A family’s charitable legacy is not simply the account or foundation it leaves behind. It also includes the stories, habits, responsibilities, and decision-making process that accompany the money. That is why the family story matters. A grandparent might explain that education became important because someone once provided a scholarship.

A business owner may care deeply about food security because the family experienced hardship early in life, but those stories provide context that a list of grants cannot. So the objective is not to require the next generation to make exactly the same choices. It’s to give them enough context to understand the values behind those choices. Again, the Patagonia story is an unusually large scale illustration of this idea, but the family did not simply ask where assets should go and asked how the structure could preserve purpose.

Thanks, Miriam. Appreciate, , the context you had there and speaking about the different strategies and family impact and giving and things of that nature. , So we’re gonna wrap up here, , and get to our Q&A section. Before we get there, , you’re gonna see a link get dropped into the chat box. If you have questions, if you want to talk with someone, please click the link to che – to schedule a chat with a Savant, , advisor and you can kind of, you know, just have a quick Q&A with somebody to talk a little bit more specifically about your situation. , And then we’ll kind of transition into the Q&A format at this point. , I know, Miriam, during your section, there were a lot of questions that came in, , particularly related to charitable, , charitable trust, remainder trust, lead trust. I’ll let you take a break, , given that you just, , had the, the long-winded section and I’ve been kind of, , sitting silent for a little bit.

I’ll let you kind of comb through the question bank. , But the first question I’ll address is, , as far as the rise of donor-advised funds, , in terms of comparing a donor-advised fund to a family foundation versus a charitable trust, what seems to be the most popular avenue people are using for charitable gifting now? , So, you know, that’s a pretty specific question, but thinking about it in broad terms, right? So, , if you’re thinking of flexibility and administrative ease, , the donor-advised fund really does work well. , It does not have any tax filing requirements like a charitable trust would or a family foundation would. , It’s simple, it’s administratively easy to use. There’s not as many, there’s not nearly as many, , attorneys that need to be involved in opening that type of account. You think about a family foundation or a charitable trust, , there’s likely going to be some attorney’s fees to get that up and running, to get that started.

, On a charitable trust, you’re gonna have to have an attorney draft that document to begin with to, that outlines, okay, if I’m sending money to, to charity now, how much is it gonna be? Is it gonna be a dollar amount? Is it gonna be a percentage? Who do I wanna leave that money to? Y – a- an attorney has to be involved to draft that document. So I would lean. The donor advice one’s definitely becoming more popular. I wouldn’t say it’s for everybody, but because it is so easy to use, because it has, , , because it has a, a component where it’s anonymous and you don’t have to attach your name to gifts, people really like that. And so that’s more what I’ve seen over the years, , not to say that’s necessarily the right answer for everybody, that, but that’s just kind of what I’ve seen.

The second question on the charitable trust, , that came through is when is the best time to use a charitable trust versus some of the other options? , I think Miriam did a really good job of, of hitting on this at a high level. , But first off, first off is, you know, if you’re not comfortable completely separating from the economic benefits of retaining the asset quite yet, having a charitable trust in place can be, , a nice option because it can either pay income to you or it can go to your heirs at the end of your life, depending on how you set it up. Now, I will say, you know, for a case use example, , charitable trusts are really effective when you have an abnormally high income tax year, right? If you’re selling a business, if you receive a stock dividend, or if you’re a beneficiary of a stock sale, all of those things that are going to artificially increase your income much more in that year, , could be good years to consider, , setting up a charitable trust.

, However, you likely wanna talk to an advisor, you’re definitely gonna have to have an attorney involved to draft that document. , But the nice feature of the charitable trust is even if you don’t necessarily want to, you know, if you don’t have charities in your head right away that you want to give to, you can actually take that, I guess, the income payment that would be going to a charity of your choice, and you can actually route that into, to a donor advised fund, , and you can set up the structure of a charitable trust that way. So it’s a lot of flexibility, , a lot of uniqueness. It can become, be very personalized based on the, what you’re trying to accomplish, , but charitable trust definitely involves quite a bit more planning. , Miriam, have you had the opportunity to look through the question bank yet and identify certain questions that you wanted to address?

Yeah. , there’s a good one here, and it’s, , “How do I know whether I should give cash, appreciated stock, or assets from my IRA?” And it’s really a great question because many people often focus on how much they wanna give rather than what they should give. And in general, appreciated stock can be very tax efficient and can make sense, but IRA assets may make sense for someone eligible for the QCD, and cash can still be appropriate in certain circumstances, but again, the best choice depends on your age, income, tax situation, and charitable goals. We say this a lot to our clients, we don’t want to let the tax tail wag the dog, and Jeff mentioned this earlier, we’re not giving a charity for the tax savings. It’s, “Do you wanna give to charity?” And then we back into how much, and then from there, you can decide which kind of asset makes the most sense.

, I got another question here about the family philanthropy, , that I touched on a little bit, and it’s, “I’d love to get my children or grandchildren involved in our family giving. They don’t seem interested. How do I engage that generation?” And what I’ve found is that engagement increases when the younger family members have a real role to play. Get them involved instead of asking them to sit in on a meeting and I’m, you know, I’m talking about teens in the early 20s, ask them to research a charity, volunteer together, or recommend where a portion of the family’s giving should go. Often, the goal isn’t teaching the philanthropy through a lecture, you know, it’s, it’s creating that experience, and it seems the younger generations more and more, they really value experiences more so than, than the actual money. So I just think it’s creating that experience that helps them see the, the impact firsthand.

Yeah, I got one more, , that came in. And again, it’s kinda on, you know, family foundations, trap falls, things to be thinking about there. , Just, you know, basically the question I’m summarizing here is, you know, given the complexity of family foundations, what should people be thinking about, , if they already have a family foundation in place? , So it, it probably goes without saying, but it’s likely if you have a family foundation set up, , you’re definitely probably at a higher probability of risk of being audited by the IRS. , It’s just one of those items where, , it sticks out like a sore thumb, kinda like if you’re a business owner where you have a lot of different deductions. , You’re just more than l – you’re more likely than the average person to potentially be audited. It doesn’t guarantee it, but, , it’s definitely something that the IRS flags and is looking for.

So there’s a lot of things that come with making sure that you are in good standing with how you’re running that family foundation, whether it qualifies as a non-operating family foundation or if it’s an operating foundation based on the amount of assets that stay within the foundation on a year-to-year basis, based on the amount of money that actually gets flushed through to the benefit of the foundation. So making sure, like, you’re not just putting money in there and having it sit there, it actually has to go towards the mission of what the family foundation is. There’s a lot of rules around that, and that’s where the IRS really, you know, wants to make sure that people aren’t just putting money in there and letting it sit there for a tax sheltered investment, per se. So just some things to be thinking about at a really high level.

, Obviously, if you’ve got more in-depth questions as it relates to family foundations, charitable trusts, , whatever it may be, , I would definitely recommend you reach out to a qualified professional, whether it’s a financial advisor, a CPA, or an attorney that deals specifically with this for affluent investors, because there is a lot of complexity in there, and you just wanna make sure if that’s the route that you’re going, , that you have all your ducks in a row and, and they’re in the right place. So, –

,

Jeff,

I got, I got one more here, – Oh, go ahead. Yeah, about the donor-advised fund, because, I mean, the, to summarize the question, they say, “You’re talking a lot about these donor-advised funds, but how do I get one set up?” , so they have become more popular because they are less complex than the family foundation that Jeff was just talking about, and you can really set those up like you’re opening a brokerage account almost, or an IRA. There’s, you know, an application that you can fill out online or with your financial advisor. , This is not endorsing them, but, you know, Charles Schwab and Fidelity offer donor-advised funds, and there’s a f, , a bunch of other custodians that offer them as well, and it’s just a matter of filling out the application and determining, you know, what you’re going to fund that account with.

They’re very, they’re fairly easy to set up. You can name it, you know, David and Susan, donor-advised fund, and you can make the donations from there anonymously, or you can put your name and you can specify what that charity, what that grant or donation should go to when you give it to the charity. Typically, you would go online or ask your advisor to submit the donation on your behalf, and they can either send a check or a wire directly to that charity. The other thing I like about the donor-advised fund is that the custodian will usually verify that that charity is an actual 501 so to confirm that you are giving to a fi – a tax-exempt organization.

Well, it seems like the more questions we answer, the more questions that continue to come in. <Laugh> So let’s, , we’ve got some time, so let’s go ahead and tackle a couple more. , And Miriam, I think you kind of addressed this earlier a little bit. We definitely talked about it at a high level in the presentation, but the question around is engagement of the next generation. How do I get my kids involved in, in engagement and having them be part of this process? And, and that is, that, that’s an important piece of the, of the process, especially depending on the type of route you’re going with your charitable, with your charitable plan. If it’s a family foundation, if it’s a donor-advised fund, typically, there needs to be a lineage or some sort of path for what’s gonna happen when you’re no longer around, right?

, The charitable trust can be structured in a way that kinda brings some finality to it when your, when your life comes to an end. , Beneficiary designations obviously just pass when somebody dies. , But how do I get my next generation involved? And I think hitting again on the why, right? Like, why are, why am I doing this? Why is it important to me? And why do I feel like it’s important for our family, right? And I think explaining that in terms that has deeper meaning than I just give for the tax benefit is incredibly important. And in most circumstances, the most successful charitable planning outcomes I see is when there is alignment and stated visions and goals amongst generation one, two, and three, right? There’s this stated vision of like, “Oh, yeah, this is what grandma and grandpa did, and this is why it was important.” And so their kids understand, and then the grandkids understand.

And, you know, it, it’s very hard to keep those stories passed down between generations. So sometimes writing a letter, , telling those stories, you know, once a year at Thanksgiving or Christmas when you’re sitting down at the dinner table, talking about the impact and the importance of what charitable gifting means individually to you, but what you want it to mean for the greater good of your family legacy. Those are really important conversations to have, and sometimes, , they can be tough to have, , because not everybody’s gonna have the same level of aptitude or interest for that topic. But if you can make 10% improvement, , each year over the course of, you know, 10 years, well, then, wow, you’ve made a lot of success in terms of having this conversation with your kids. So I think if it’s really important to you, don’t ignore it, don’t push it to the side, be open about it, have the conversation, , bring them into it so they feel part of it, something that’s bigger than them.

Miriam, did we have anything else or did that. I see some questions, but a lot of them are, you know, things that we’ve already addressed, or they were asked in similar, you know, formats as the other ones. , So I think that, I think that wraps up the session for today. , Wanna take a moment and say thank you to everybody for setting aside time. Like I said, if you have questions, schedule a 15-minute phone call. You can also just go on our website at savantwealth.com. , Go ahead and browse some of the content we have on there. There’s also features that you can use if you have questions. , You can register and, and get in contact with a team member. So please feel free to reach out either directly through the website or using the chat box. , It was really nice having the opportunity to speak to you guys all today.

We hope you found this helpful, and, we look forward to have you back for future webinars in the weeks to come. Thanks. Take care, guys. Have a good day. Bye,

Everyone.

If you enjoyed this webinar, visit savantwealth.com/guides and download our complimentary guidebooks, checklists, and other useful financial resources.