Chances are, you’ve already noticed that a major transfer of wealth is happening as your Baby Boomer clients establish financial and estate plans to pass their wealth to their Gen X and Millennial children.
Most attorneys, financial advisors and CPAs have seen the Cerulli study’s estimate that $124 trillion in wealth in the U.S. will transfer through 2048. The research estimates that most of this wealth–$105 trillion–will pass directly to children, grandchildren and other heirs. And, notably, the study estimates that $18 trillion will flow to philanthropy. More specifically for advisors located here in Iowa, an estimated $128 billion will be transitioned over the next 40 years according to a study by the Iowa Council of Foundations.
As the transfer of wealth gains momentum, advisors have a major opportunity to position themselves as trusted experts who can help clients not only structure efficient lifetime and estate gifts to heirs but also help ensure that clients’ charitable wishes are achieved. The Community Foundation is here as a resource for advisors to help incorporate philanthropy into clients’ financial and estate plans.
Here’s why this is so important:
– There’s a knowledge gap. Clients may not be aware of the options and benefits of charitable planning. Even many of your affluent clients may still be writing checks to their favorite nonprofits, not realizing that gifts of appreciated stock, for example, can be more tax-efficient, and that tools at the Community Foundation, such as donor advised funds, can be incredibly useful.
– Next-level strategies are key. Your clients will need to implement sophisticated strategies for transferring assets smoothly and tax-efficiently. Clients want to maximize the results of their charitable gifts while also protecting their families' interests. Leaning on the Community Foundation to help structure gifts of complex assets, such as closely-held business interests, can make a huge difference in reducing a client’s tax bill and achieving meaningful community impact.
– Legacy planning starts now. It’s tempting to put off addressing a client’s wishes to support favorite nonprofits in an estate plan. Charitable bequests are best addressed as part of a comprehensive estate and financial plan. Naming a fund at the Community Foundation as the beneficiary of a client’s IRA, for example, is an extremely tax-efficient way to accomplish charitable wishes.
Our team is here to augment your expertise in charitable giving strategies. Not only will you be better able to meet clients’ needs, but you’ll also strengthen relationships and improve client retention. Please reach out to learn more about how the Community Foundation can help your clients make a lasting impact with their wealth while achieving their financial goals.