“What happens when I die?” On an esoteric level, financial advisors cannot answer that question for their clients. However, they can in terms of their clients’ charitable legacies. If you have clients to whom philanthropy has been, is or will be important, a conversation needs to be had about building charitable giving into their legacy plans.
Building trusted relationships with your clients is your priority. But, their heirs and legacy are as important to your clients as the client relationship is to financial advisors. Bringing both of those into the fold is part of those trusted relationships because not only are your clients’ children, grandchildren and great-grandchildren eager to learn about their families’ histories, priorities and values, but also connect with you.
Having profound conversations about leaving a charitable legacy only solidifies client relationships and opens the door to working with their heirs in the future via a charitable giving account. Take Alan and Jan for example.
Alan and Jan are Kansas City residents, but their passions span the globe. Their children, Amy and Beth, live in California and New York and are successor advisors on their parents’ donor-advised fund. Alan and Jan documented their plan to distribute at their deaths a percentage of their fund’s assets to organizations in their respective hometowns, Pasadena, California and Omaha, Nebraska. They’ve arranged an annual donation for 10 years to support a UNESCO World Heritage site in India. They documented their mission and values, regularly discussing them with Amy and Beth, leaving a charitable legacy when they are gone.
Alan and Jan chose a donor-advised fund to help carry out their philanthropy. Their succession plan includes naming their children successor advisors of the fund.
What is a donor-advised fund?
Your clients give to donor-advised funds and take those donations as their charitable deductions. The funds in these charitable giving accounts are invested and grow tax free. All the while, your clients can make grants from their funds to nonprofit organizations that mean the most to them.
Our philanthropic advisors are experts in multigenerational giving. We can work with you, your clients and their family members to understand values, interests and goals, and then develop a roadmap for giving through customized plans to engage all generations in charitable activities.
Another option is for us to create a plan that meets your clients’ needs for their review on their own time. Should conversations turn difficult, we also can serve as a neutral party. In the end, you know your clients best, and you can involve our experts as much or as little as you want.
Like with Alan and Jan, the charitable giving management conversation eventually turns to carry out their charitable legacies, and the question becomes what happens to a charitable fund after your clients’ lifetimes. Greater Horizons has four options to consider:
- Gather and Unify
Successor advisors can make grants based on the documented charitable intent. - Divide and Multiply
The original donor-advised fund can be split into multiple funds so each successor advisor has their own fund from which they can grant to their favorite charities. - Leave the Work to Us
We can manage the grantmaking from the fund based on the documented charitable intent. - Hybrid
A designated portion of the charitable assets is available for successor advisors to grant from while we grant the remaining assets according to documented plans.
Even if you manage your clients’ charitable giving accounts, our philanthropic advisors are happy to work with them and their families to decide which option works best to carry out their charitable legacy. And, we are here to be a resource as you create an investment plan that empowers your clients’ names to live on as a charitable legacy.
Contact us to learn more about how we can assist you with helping your clients leave their charitable legacies.