Gift Planning for the Ages
Charitable gift planning has historically been reserved for older people, but it shouldn’t be. People of all ages create charitable gift plans every day. You can talk to literally anyone about a gift plan at any time.
In my experience, gift plans are created during significant “life events”. These events happen at virtually any time in a person’s adult life. Different life events do give rise to specific gift plan types. Let’s walk through them chronologically so that you know what to be listening for and when to bring up the appropriate giving ideas.
Finish College/Graduate School and Begin Career
With a first job, often comes a variety of employee benefits, such as a retirement plan and group life insurance. A new employee can easily name charity as a beneficiary of either their retirement plan or life insurance. It doesn’t cost a dime and it’s very easy to do. They will need the charity’s legal name, address, and tax ID number for the beneficiary designation form.
Welcome First Child to the Family
Young parents will often update beneficiary designations on retirement accounts/life insurance and create their first Will/Living Trust upon the arrival of their first child. Any time someone updates beneficiary designations or estate planning documents is a time when they could establish a charitable gift from those financial and insurance accounts and/or their estate.
Exercise Stock Options or Rebalance Stock Portfolio
Both of these transactions create taxable income and even though taxes are never the WHY behind a gift, they will often determine the WHEN of a gift. Extra taxable income often gives people the opportunity to make a significant charitable gift AND enjoy some tax savings. Both the exercise of stock options and the rebalancing of a stock portfolio give rise to charitable gifts of stock.
Children Graduate from College
Many parents I know jump for joy when their children graduate from college. They’re both happy for the child’s accomplishment AND for the end of tuition payments. This event often frees up assets for increased charitable giving.
Welcome First Grandchild to the Family
New grandparents often update their estate documents and beneficiary designations when the first grandchild arrives. This is an ideal time for them to add a charitable gift to their plans.
At retirement people take stock of their assets, determine how much they will need in retirement, and how much extra they have that could be shared with charity.
Sale of a Business
The sale of a business is likely the biggest taxable event of a person’s life AND the most significant professional event. Many business owners will give some of their business stock to charity prior to the sale to minimize the capital gains tax. Others may contribute cash to charity after the sale. Either way, a business sale will provide the owner with the opportunity to make transformational charitable gifts.
First Spouse Passes Away
When someone loses their spouse, they will often update their estate documents and beneficiary designations. They may also consider downsizing their residence as well. The loss of a spouse frequently spurs someone to think about remembering their loved one by making charitable gifts in their honor. That could update their estate documents with a charitable bequest or beneficiary designation. They may even consider donating the family home when they downsize.
As you can see, gift planning happens at nearly any stage of life. It need not be reserved for older folks. Let’s give people the joy of making significant gifts – no matter their age.
Here’s a handy table outlining these life events and the potential gifts that come along with them. It comes from Chapter 1 of my new book, Turning Wealth Into What Matters. In it, you’ll learn more about life event gift planning as well as how to accept virtually any asset someone wants to contribute. Happy reading!