2014 – Discover, Explore and Make the Highest Impact With What You Have To Share
January 1, 2014 | Joy Kirsch
As we head into the New Year, and your holiday bills start showing up in the mail, you may be thinking about what giving and sharing means to you and how you want to re-imagine that going forward.
When you receive a large lump sum as a result of losing your husband, you might assume that having more means giving away more. But the reality isn’t so simple. How you give and share is a big deal, and those decisions can have long-term impact, both financial and emotional. Like so many other decisions, you have a much better chance of getting it right, if you follow a process. Working with a financial advisor who specializes in life transitions can help you create a Giving and Sharing Plan that can make your charitable gifting one of the best parts of life with benefits that go way beyond tax breaks. Here’s a glimpse into the questions that your financial transition specialist™ will ask and the discussions and decisions that will follow.
The first questions help you to define the meaning behind your giving so that you give with a sense of purpose. I call this the Why behind giving. You will answer questions such as:
- What does sharing wealth mean to you?
- How would it feel if you didn’t share?
- Who or what inspires you to share?
You should then address To Whom, How Much, When, and How.
Defining “To Whom” can be challenging if you and your late husband had different groups that you preferred to benefit. Should you continue to give to his favorite charities or only those that you both loved? To start, make three separate lists of favorite charities under the headings: His, Mine, and Ours.
As for How Much, you may be driven by religious traditions or tax consequences, but certainly should also consider long-term financial consequences. Before gifting a percentage of newly inherited lump sums, consider whether you should give a percentage of the income the inheritance will generate each year rather than a percentage of the principal itself.
The next parts of the Giving and Sharing Plan should address the How and the When. The questions in the How section can help you discover other ways to gift than to give cash. For example, if your financial transitionist recommends that you may want an alternative to giving away income-producing assets, you may find that you can instead give a piece of valuable art, a stock in your investment account that doesn’t pay dividends but has grown in value, or give a service that has financial value (Caveat: these gifts are not deductible.) This area of your Giving and Sharing Plan will also help you determine if philanthropy is an important part of the life lessons that you want to share with your children and how you will do that. The When discussion can help you determine whether you want to give gifts upon your her death or during your lifetime. You may want to explore the concepts of creating Donor Advised Funds or Foundations in honor of your late husband or a charitable remainder trust that will allow you to take income during your lifetime, and leave the amount remaining in the trust at your death to the charity.
Giving and Sharing Plans have a personal component and a financial component, and both are equally important and equally complex. Success begins with an examination of the personal and then explores the financial. Only after you’ve discovered where your heart wants to go, are you best positioned to use your wealth in the service of your highest purpose, both during your lifetime and beyond. Should you desire a complimentary copy of the Giving and Sharing Worksheet, please send me an email to firstname.lastname@example.org.
Here’s wishing you a joyus New Year,
Securities, advisory services and financial planning offered through LPL Financial, a Registered Investment Advisor.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.