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Six Benefits of Using a Donor Advised Fund

4 days ago By Evan Lange

Most financial advisors, attorneys, and CPAs know the benefits of using a donor advised fund (DAF). However, DAFs are still often underutilized by the public. While many may have used DAFs for large net worth clients a few decades ago, DAFs are still a useful tool which many people can use to help grow their generosity. Here is a short list you can use to show clients the benefits of using a DAF to grow their giving with less hassle: Anyone can open a DAF online in a matter of minutes, and The Signatry requires no minimum deposit or balance upon starting a fund.…

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Advisor

Donor Advised Fund or Private Foundation?

1 month ago By Joe Williams

Two of the most popular charitable vehicles are donor advised funds and private foundations, but which is best to use in your generosity journey?  That depends. Nearly $70 billion in grants to charity came through private foundations and donor advised funds (DAFs) in 2017. Understanding the differences between these two vehicles is crucial in deciding which is most appropriate for you and your family’s giving. Here are eight key comparisons to consider: Start-Up Cost DAFs: Can be established immediately at a low or no cost. Most sponsors require an initial minimum contribution of $5,000 or more, but you can open…

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Advisor

3 Questions to Uncover Attitudes About Money

2 months ago By Evan Lange

Determining a client’s view of money is helpful when creating a financial strategy. It will help determine where and what to invest. Here are three questions to help you uncover your clients’ attitude about money. What is your story? This broad question allows clients to open up about their experiences and enable you to discover their background, goals, and what they are priorities are. Not everyone will be willing to open up at first pass, but with engaged listening and interaction, this conversation can lead you to a deeper understanding of your clients’ core values. What are you passionate about?…

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Advisor

Spring, Basketball, and Taxes

3 months ago By Evan Lange

Happy Spring! I love this time of year because the weather is getting warmer, lots of good basketball games, and it is tax time. Yes, I get excited about tax season because we finally find out how year-end tax planning strategies worked.  This is especially true because the 2018 tax year applied the new 2017 tax reform laws. Based on the phone calls I have received this Spring; a lot of people are feeling the effects of the changes.  Below is a recap of these conversations and some potential solutions moving forward: Doubled Standard Deduction. Only about 10% of all households in the U.S. will itemize their tax deductions for the 2018 tax year. The standard deduction (increased to $24,000 for married and $12,000 for individual), meant that many households that itemized deductions, including charitable giving, will no longer need to itemize. Unfortunately, several households left tax savings on the table, because they failed to plan properly. SALT Deduction Capped. State and local taxes (SALT) used to be fully deductible, but now SALT deductions are now capped at $10,000. This has affected several middle-income earners. Charitable Deduction Increases. Taxpayers that itemize may now deduct up to 60% of their adjusted gross income each year in charitable contributions; a 10% increase from 2017. Taxpayers may carry forward any amount that exceeds this limit up to five years after the gift is made. Taxpayers may still deduct up to 30% of their AGI using gifts non-cash assets to charity. The most noticeable effect of the 2017 tax reform, from a charitable giving standpoint, most households will not receive a tax benefit (in the form of a deduction) from their charitable gifts in 2018. In my opinion, this has occurred because of the increased standard deduction and the cap on the SALT deduction. For 2019, make sure that your clients consider two easy tax-saving strategies: Bunching charitable gifts one year using a donor advised fund. By combining multiple years of charitable giving in 2019, clients will be able to itemize their deductions for 2019. In the subsequent years, the client could give to charity from their DAF and then take the standard deduction for those years. Click here to learn more about bunching. Give assets! While several itemized deductions have been eliminated, the charitable deduction remained intact, including donating capital assets (assets that would be subject to long-term capital gains tax). When capital assets are given the donor receives a fair market value income tax deduction for the donation, and the capital gains that would have been paid will likely be avoided entirely by the charity. The vast majority of all charitable giving in the U.S. are cash gifts, but the real tax benefit is by donating capital assets!  Make sure your clients do it!

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Advisor

Having the Conversation on Asset Giving

4 months ago By Evan Lange

Many advisors find that being involved with their client’s giving is one of the most meaningful aspects of their work. Philanthropy is an easy way to build deeper relationships with clients. It not only paves the way for a lasting relationship but offers inroads into the next generation of clients and future givers. When your client is ready for the conversation on giving, discussing their assets will play a vital role in the discussion. The following three points offer an outline that will aid in the conversation. Identify which assets to contribute Whether your client is motivated by philanthropic or tax advantage goals, determining what types of assets they can gift is a crucial first step. The common types of assets that are generally gifted are cash, securities, real estate, or closely held business interest. All of these can be given through a donor advised fund. Timing of gift A recent article in Forbes states, “donating property that has appreciated in value, like stock, can result in a double benefit…not only can you deduct the fair market value of the property (so long as you’ve owned it for at least one year), you will avoid paying capital gains tax” Gift valuation guidelines are established in the current tax regulations. In general, the value of the gift is based on the type of asset and the date of contribution, which is typically the date the asset is delivered to the receiving organization. Gifting a complex asset can be a lengthy process. It is important to evaluate the timing of the gift to ensure it will benefit your client within the current tax year. Selecting a charity Deciding what organizations to support, is usually the most exciting part of the process for your client. For many donors, the organizations they choose often have personal meaning and speak to their experiences. By giving complex assets through The Signatry, donors can make grants to smaller nonprofits that would otherwise be unable to accept complex gifts. https://www.forbes.com/sites/kellyphillipserb/2018/12/11/14-tips-for-making-your-charitable-gift-tax-deductible-in-2018/#65eb5fb5f80c  

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Advisor

Overcoming Common Challenges with Generosity in Estate Planning

5 months ago By Evan Lange

Clients rely on advisors for security in their financial planning decisions. Many feel the weight of large financial decisions with implications for family, relationships, and Kingdom impact. To help with this added stress of estate planning, wise stewardship is needed. When it comes to generosity inside of estate planning, it is imperative to have a strategy. Once a plan is in place, your client will feel confident about their charitable giving and excited about the difference they can make within their legacy. One of the first questions many clients ask is how to decide where to give? To create a well-planned…

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Advisor

Starting the Generosity Conversation

7 months ago By The Signatry

It is no secret that charitable giving benefits your client and your community. Now more than ever, clients are open to discussing philanthropy and rely on the expert advice of their advisor.  Engaging in conversation and sharing your knowledge of philanthropy furthers relationships and adds value to your practice. This is an excellent opportunity to discuss tax solutions that can also accomplish meaningful work. According to the 2018 U.S. Trust study of high net-worth philanthropy, most high-net-worth individuals are already giving, but only 49% of donors have a strategy for their giving. There is a significant opportunity here for advisors to grow their practices. By participating in the generosity conversations, you can further the relationships with your clients as you help them achieve the greatest impact towards the charities most important to them. Understanding your client’s passions allows you to tailor your expertise to their unique interests and pinpoint how they imagine their lasting legacy. Year-end meetings are an excellent opportunity to share the advantages of charitable giving. A good way to start the conversation is to ask engaging questions about charity. Here are some examples: Are there any charitable interests or community needs you would like to address? What issues are you passionate about? Have you considered donating public stock as a way to use all your resources for giving? Giving stock gifts not only helps you save on taxes but also supports the causes you love. Are you currently making gifts to any charitable organizations? If so, which ones? What causes and values do you want to pass on? Initiating this conversation will benefit everyone involved. This opens the door to discuss year-end tax strategies with your clients and will invite them to create a lasting legacy of generosity. It will also strengthen your relationships and credibility with clients and their family. The long-term effects of their generosity will reach beyond your office; impacting your client, their family, and the community.   Sources: https://blog.commonwealth.com/how-to-talk-about-philanthropy-with-your-clients https://cnycf.org/page.aspx?pid=836#.W_Ctj5NKjq0 http://www.foundationsource.com/wp-content/uploads/resources/A_Whitepaper_HowToTalkTo.pdf https://www.aefonline.org/blog/how-have-conversations-about-charitable-giving https://www.ustrust.com/articles/2018-us-trust-study-of-high-net-worth-philanthropy.html  

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Advisor

2 Year End Giving Strategies

9 months ago By The Signatry

For many donors, deductions have played a significant role in their year-end charitable contributions. However, with recent changes in tax laws, your clients may feel unsure of how to navigate their donations. Given that the 2017 Tax Act doubled the standard deduction, people who used to itemize may be less likely to do so. Reassuring your clients that many of the giving strategies they’re accustomed to will continue to offer them tax benefits and will continue to benefit the organizations close to their heart is always a win/win. Although your client may know which organizations they want to donate to, they…

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Advisor

Ministry & The Marketplace

10 months ago By The Signatry

Ministry & The Marketplace  I’ve been inspired and challenged by the positive role models I’ve studied in the Bible. Jesus is clearly our most inspiring and challenging exemplar, but many others also stand before us. I’ll nominate the Apostle Paul for inclusion in this group. He was a giant among the early church leaders, a brilliant theologian, church-planter and… tent-maker. He voluntarily chose to stay in the marketplace to support himself so he would not be a financial burden to the young church:  “We were not idle when we were with you, nor did we eat anyone’s food without paying…

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