Give Clients Peace of Mind as They Pack Their Bags

Jul 15, 2022

By Lynne Yontz, CAP®, FCEP | Chief Charitable Giving Officer

For those who have the honor of serving as trusted partners in developing estate plans for clients, vacation planning often means our office phones will start ringing. As people begin making travel plans, setting itineraries and writing packing lists; finalizing estate plans is often added to the list of things to do before vacation can begin. The peace of mind provided by knowing affairs are in order allows your clients to pack their bags stress-free.

An upcoming vacation may be what prompts a client to contact you to make updates or put the finishing touches on their estate plans. Still, you have likely worked with them and developed a relationship for many years. You are in a unique position to learn about their lives and the legacy they wish to leave. This legacy often includes how they hope to support not only their heirs but also the causes and communities they care about through their estate. And just as finalizing estate plans makes good sense before a vacation, including charitable giving in a trust or will expands the tools available to you to maximize your client's giving and tax-wise strategies. As you talk with clients, consider the following strategies to meet their goals.

Charitable giving through a trust or will offers unique tax-saving tools. While the three recipients of an estate may be people, charity or the government, your thoughtful planning and incorporation of charitable giving into a client's estate plan can ensure the percentage allocated to each is in line with your client's goals. Consider the client's entire balance sheet to determine assets best given to heirs and those best suited for charity. For example, IRA assets are a gift better left to charity as heirs would pay ordinary income tax on the inherited IRA distributions. 

Clients often want to financially provide for heirs as part of their estate planning, but they can also pass on their passion for supporting charity to future generations. One such opportunity to plan today for future giving is through a legacy fund. You work with your clients to determine the asset they would like to direct to a legacy fund through their trust or will. The Community Foundation then comes alongside you and your clients to determine the causes they want to support with this gift after their lifetime. They can choose to support a variety of causes directly, create a field of interest fund to invest in the areas that have mattered most to them, create a donor advised fund from which named heirs can make grants over time to causes or create a combination of each of those options. Legacy funds are flexible, so as your client's charitable interests change over time or their family grows, they can update the directive of their legacy fund without making edits to their overall estate planning documents. No fees are charged for a legacy fund during the donor's lifetime, and they can be assured their wishes will be followed as directed. Legacy funds are a helpful tool for heirs as they don't have to make decisions about charities or causes their loved one may have wanted to support or manage a private foundation that could be more work than they want or can manage on their own. 

Charitable giving through a trust or will eases concerns about outliving assets during one's lifetime or giving away an asset they want to continue to use. Establishing a charitable remainder trust or a charitable gift annuity allows your client to receive payments throughout their lifetime, with the remainder distributed to their selected causes after their passing. Additionally, a retained life interest, also known as a retained life estate, allows a donor to deed the remainder interest in a piece of real estate to the Community Foundation, claim a current charitable deduction for the asset and avoid probate. The donor can continue using the property while they are alive, either living there, or renting it to others. Upon their passing, the Community Foundation sells the asset with the proceeds directed to the charities previously determined by the donor.

There is no one-size-fits-all approach to including charitable giving in estate plans. Your clients have lived unique lives, and their strategies for giving past their lifetime should be no different. As you have conversations with clients about their goals and objectives, take advantage of charitable counsel like the Community Foundation's Strategic Giving Services. Whether meeting with your client individually to discuss their interests, values and goals or convening multiple generations to develop a family charitable mission statement, gain the advantage of working with trained professionals in charitable conversations as an extension of your team and add value to your relationships. This level of service can enhance the trust developed to ensure the plan put in place will be executed just as desired.

Your client's generosity has improved the quality of life in their communities. This impact can continue to be achieved through thoughtful planning for generations to come. The Community Foundation of Greater Des Moines and our statewide network of 46 county and community affiliates are always here to partner with you and your clients to develop plans to match their unique needs. Whether evaluating charitable giving tools available to best meet their goals or helping to connect with local organizations that match their interests, we are here to serve as an extension of your team. That way, as you make your own summer vacation plans, you can travel with the peace of mind that there is a partner back home working alongside you with the same commitment to your clients.

This article was published in Iowa Lawyer Magazine.