Change is an inevitable part of life. As advisors, we witness this every day through our clients as they start new jobs, send their kids off to college, lose a parent or gain a grandchild. Change can be daunting – but viewed through a different lens, it presents opportunity to raise the questions about philanthropy.
In many circumstances, philanthropy can be the best solution to the change that’s taking place – if only we think to ask.
Caution, that we don’t prey upon our clients, but good advisors would never be guilty of that anyway.
Let’s look at some major life changes and see where we might discuss gift opportunities at the appropriate time.
Consider first, the retirement of a major breadwinner who also seeks to downsize. As ordinary income (a paycheck) ceases, the desire to convert dormant or low yielding assets into supplemental income normally increases. This may provide an opening to talk about repositioning low basis assets into a pooled income fund or a charitable remainder trust – even a gift annuity. Furthermore, the downsizing might free up additional capital with which to consider similar split interest gifts.
The birth of a grandchild may inspire a fund for college education – accomplished by utilizing a Flip-CRT that turns on income in 18 years. Plus, you’re likely to be the only advisor capable of making that suggestion.
Widowhood is a significant one – causing not only emotional upheaval but an economic crisis as well. If the late spouse was the decision maker on finances, the surviving spouse may feel lost and frightened about the future. Perhaps the best solution is simplification and consolidation – taking multiple accounts and creating one large gift annuity, charitable trust or pooled income fund that delivers quarterly income. You should also examine gifts such as life estate agreements – which relieves the children of dealing with a house they usually don’t want anyway.
Another major change often comes in the form of serious illness. Again, advisors must be sensitive and aware of their clients’ emotional well-being and the timing of any serious discussions, but there are numerous discussions that can be had around philanthropy in the face of illness. Supporting further research out of gratitude (recovery) or out of grief is a common goal. Effecting an appropriate gift based on the resources and needs of your clients is best undertaken by you, the advisor, and not someone less familiar with the situation.
Change is everywhere and change is constant. While some changes go unnoticed, others represent a prime force in the lives of our clients. As advisors, schooled in the art and science of philanthropy, no one is better positioned to help your clients cope and respond – making wise choices and incorporating powerful solutions that only philanthropy can.
Be an advisor hero – find the unique solutions that no one else will. Give me a call at (704) 698-4055 or email me at firstname.lastname@example.org for more information on how charitable planning can benefit your clients.
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