Darcy K. Houghton: Planning with gifts
We have discussed giving and how we impact others by giving overtly, intentionally, and cheerfully. Let’s now raise the bar to discuss “planned giving.”
What is planned giving compared to everyday giving? Planned giving might look more like buying a house and everyday giving might look more like buying groceries. Just like when buying a house, planned giving is something for which we budget, prepare, and develop a plan. A planned gift may be only a few hundred dollars, but typically they are larger in amount and “the plan” is often created with input from legal, accounting and financial advisers. Even when these gifts are driven by purely philanthropic purposes, the plan may be implemented to make the gift go farther.
The simplest planned gift names a charitable beneficiary in a will or trust. In many instances a 10 percent gift will be virtually unmissed by heirs, yet, possibly life-changing for a charity. You may want to restrict the use of the funds to a specific purpose or improvement within the charity. Studies show that if asked, most people will consider such a gift if they know about them – now you know!
A tax focused gift will result in income or estate tax savings and might be a gift of appreciated property or a gift from an IRA, as charities do not pay income taxes. The benefits of planned giving allow families to give significant amounts to charity in a manner where the family is able to avoid taxes, enjoy some direction on how the money is spent by the charity, and, depending upon the complexity of the plan, possibly receive a stream of income as well!
One of the best features of planned giving may be its social benefits. Large gifts may have a family name associated with them, enhancing the family image! Or, a donor-advised fund or a foundation may be created where the children participate in the decision as to how annual gifts are made. Much has been said about “spoiled rich kids;” giving is an excellent way to introduce children to the challenges faced by many – financial, safety, health, or when the challenged has no voice of its own. Planned giving can bring children into the trenches to see how charities help others. Studies show that people need a purpose and that giving can fulfill that purpose.
Planned giving can be simple or more complex but with far-reaching benefits. We haven’t begun to scratch the surface, but if you have a heart to support an organization, now or later, let them know and they can connect you with people who can help you with your plan.
• Darcy Houghton is a resident of Carson City and accepts cases in estate planning and business law. She may be reached at 775-882-1777, or visit her website at http://www.hou2plan.com.