After giving directly out of your IRA, the next step that can be taken to maximize tax advantages is giving appreciated assets to charity. This can be a complicated process if you have an asset that you want to split between multiple charities. Thankfully, there is a solution, a donor advised fund.
{Audio} Charitable Giving - Part 2
A donor advised fund allows gifting of an appreciated asset, which could be real estate, farm equipment, livestock, or stocks to the donor advised fund. The fund then sells the asset you gifted, which allows you to disburse monetary gifts to charities of your choice over time. One of the main benefits for using a donor advised fund is that you can gift an asset and take the tax break in the year of the gift, all while having more control over whom and when you gift the funds.
Another advantage to utilizing a donor advised fund allows clients to see how their gifts impact the charity of their choice while they are still alive, rather than donating upon passing. If the owner of a donor advised fund does pass they can either have designated beneficiaries of what’s left in the account or they can designate someone to take over for them and continue to give out the remaining balance as they see fit.
If you are unwinding a farm or have an asset that has been in the family for several years that you are planning to donate upon your passing, let us help you put a plan in place that will not only maximize tax advantages, but also allows you to see the benefits of your gift. There are many charities that are hurting due to the pandemic and we are watching our clients find more fulfillment seeing those assets go to work while they are still living.
If you are interested in learning more about the advantages of donor advised funds, give our office a call at 320-222-4236 to schedule a no-cost meeting.