Broker Check

Philanthropic Planning

Philanthropic Advising has traditionally been a more or less “passive” activity on the part of financial advisers. By this we mean it is a subject that is addressed when clients bring it up. For example, there are folks who wish to find a way to remember their alma mater, or their religious institution, and are looking for ways to do this, both during their lives and after they’re gone. This kind of discussion leads to explorations of familiar tools and instruments – Charitable Remainder or Lead Trusts, Private Foundations, gifts of highly appreciated securities or other property, Donor Advised Funds, gifts of life insurance, outright bequests, annual gifts. There are circumstances and needs that help guide us to recommendations that support our clients’ wishes and bring them to fruition.

At the Davis Financial Group, we work with clients’ attorneys and tax advisers, often meeting with them and our client, and can then implement a philanthropic plan that takes advantage of the nature of the asset being gifted, other members of their families, their income and estate tax situation, and the needs of the charity or charities.

But for us at The Davis Group there is another, more “active” role that we take upon ourselves, and in many ways, this is the most satisfying. We have found that many of our clients have deep wells of generosity -- or at least the intention to act generously in support of things that are important to them. But as in many other things, many of these impulses don’t get acted upon during their lifetimes. They make annual donations, will sometimes make a larger gift when there is an emergency need at their church, or for a building fund, but in general, charitable giving is kept in check and in many cases deferred until death, and covered in their wills or trust documents. This phenomenon runs in parallel with gifting to children – until we do a comprehensive financial plan, and have understand our cash flow realities, it can be scary to give away what we fear we might someday fun out of.

The greatest joy we experience as planners is the smiles we see in clients who learn that they actually do have the capacity to act upon their generous impulses and go ahead and act in accordance with their values by supporting institutions (or their children!) that are dear to them and have the prospect ahead of them of experiencing the gratification of doing good things with their wealth while they are still alive.

In both cases, there are often economic benefits to this kind of lifetime gifting as well – philanthropic giving, of course, can carry with it important tax benefits. And gifting to children is one of the most efficient ways to reduce the taxable estate and therefore potentially lower or even eliminate estate taxes. Doing well by doing good – the gifts of comprehensive financial planning!

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