Your Gift To Future Generations
Picasso, Renoir, Rembrandt and Van Gogh changed the imaginations of their times through their groundbreaking painting styles and left legacies of paint on canvas for the rest of us to enjoy. Jack London, Hemingway, Alice Walker wrote and typed away and left generations of readers appreciative of their work and times. Clara Barton started the American Red Cross and changed how our country responds to emergencies. Bill Gates’ software ushered in a new era where we now have access to media, news, writing tools and more in a small box under our desks.
The legacies of the famous artists, authors, community leaders and business people are often well known. We see reminders of their impact on trips to museums, in history books or in the items we use every day.
Many of us have a similar desire to leave a legacy and have the impact of our careers, volunteer efforts and parenting live on. Most of us do not desire to be in the newspapers each day or to have the public life of the famous. We prefer to work on our legacies in different ways – helping our children grow into thoughtful, independent people; have our work leave an impact on our clients or customers; or make our communities better places to live.
The passion for making an impact takes different forms and is expressed in many different ways. To some, it means leaving a gift to a nonprofit organization or to help continue the educational work of an alma mater. To others, it means leaving their family with the skills, tools and funding to pursue their life interests. Still others prefer to volunteer their time and energy to community organizations. There are those who put their passion into their hobbies and collections and make a difference by sharing their interests with those around them.
We enjoy talking to our clients about the gifts they plan to give to family, friends, nonprofits and their communities. These conversations help us frame the recommendations we make and the partnership we form with you to help you achieve your goals.
There are multiple strategies you can take when looking to make gifts that will make a difference. First, the decision must be made of what type of gift and to whom. Then, we can look at specific strategies to fund those goals.
This is the most common way that our clients look to provide a gift for a future generation. This can mean anything from funding private elementary schools and advanced degrees to specific types of training. It may mean paying for tutors and special services to help a family with learning challenges to read and write.
These gifts can be handled by funding certain types of accounts over time and allowing those accounts to build enough value to fund the education goals at a future date. There are multiple account types that can be used and we review these to make sure they fit the individual goals the best way possible. Education can also be paid from current income or directly as a gift. These choices should be coordinated with other gifting and tax strategies to provide the most benefit with the least amount of additional cost or administrative work possible.
Estate Planning For Family Wealth Transfer
Many individuals look to leave a family legacy upon their death. This is the case for many people who may be unsure of what they will need in their own lifetime but still prefer to direct where any remainder assets will go.
Proactive families who wish to leave inheritances to children and grandchildren have numerous tools they can use. We often coordinate the planning with the estate planning attorney to make simple legacy gifts at death. Homes, collectibles, art and jewelry are usually put into this type of planning. Additional wealth can be created or passed along by designating assets for the estate, the use of life insurance or funding trusts. Retirement plan assets require additional consideration to preserve tax benefits as long as possible.
Most of our clients make donations to nonprofits, colleges and health institutions each year. Gifts to schools and colleges are usually made to help others gain access to the benefits of education that might otherwise not be affordable. Gifts to community groups are made to increase the standard and quality of living across the cities and towns we live in. Arts groups raise money from those who want to provide exciting, thought-provoking and interesting experiences to those around them.
The impact of your giving can increase greatly with some planning. You may prefer to make a large gift in one year to have a chair, building or room named in your honor. Trusts can be used to reposition assets to generate income and provide for the remainder to go to a nonprofit. Gifts upon death can be used to make an impact that would not be possible during life. These larger gifts should be coordinated with the total tax, estate and financial planning process to make the best use of government incentives.
Business owners sometimes seek to have the business name last and to provide continued employment to family members and long-time team members. These people need to build their legacy through creating a business dependent on key personnel and operation standards – not one tied to the personality and force of the owner. This business legacy could include finding a family member to run the business once the founder decides to retire.
The financial plan helps identify the key drivers and goals you have. Your legacy and gifts to future generations will be unique and personal to you. The methods used to produce and carry out your desires can be varied. We look forward to our next conversation about financial planning, investing and helping you achieve your goals. We are passionate about the work we do and the advice we can provide to you.
Rob Wrubel, CFP,® AIF® is a Senior Investment Consultant with Cascade Investment Group, member FINRA & SIPC. Cascade Investment Group is not a tax or legal advisor. You should always consult with your tax advisor or attorney before taking any actions that may have tax consequences.