Review your clients’ beneficiary designations. Ensure your clients’ beneficiaries are up to date on your retirement accounts, insurance policies and other assets. Naming a charity like the Foundation as the primary or secondary beneficiary is an easy way to make a significant future impact at no additional cost.
Satisfy required minimum distributions (RMD). If your client owns a traditional or inherited IRA and they haven’t yet taken their RMD for 2024, they can transfer up to $105,000 directly to charity like The Foundation for Delaware County and avoid paying taxes on the distribution. This tax-savvy strategy is available to all IRA owners beginning at age 70 ½. We recommend initiating IRA distributions by Dec. 15, to ensure your clients’ gifts count toward the 2024 tax year.
Take inventory of life insurance policies. Many people discover they have insurance policies they no longer need because their children are now financially independent, their mortgage is paid off, or they have retired. They can transfer the ownership of an unneeded policy to charity in exchange for a tax deduction on the policy’s current value.
Evaluate the performance of their investments. Recent stock market rallies have caused investment accounts to reach record highs, making donations of appreciated stock an especially smart strategy. They’ll receive a deduction for the fair market value and eliminate capital gains taxes, which means more money will go to their favorite causes.
Diversify their retirement income. With a charitable gift annuity (CGA), you can lock in the current high rates and receive a fixed income stream for life. Plus, new “Legacy IRA” provisions allow donors over 70 ½ to fund a CGA with a one-time, tax-free transfer of up to $53,000 from their IRA. Not all nonprofits offer CGAs, but the Foundation does.
Bunch their gifts in a charitable fund. By consolidating multiple years of donations into a single tax year, you can exceed the standard deduction threshold and claim their full tax deduction now, while spreading out grants to their favorite charities over time.
Consider their business succession plans. Many business owners take stock of their goals and future plans at year-end. If retirement is on the horizon, owners of a privately held company can offset taxes from the sale by donating a portion of the interests to charity. For the best outcome, start the conversation well in advance of any potential sale.
Assess their estate planning documents. Review their will, trust and powers of attorney to ensure they reflect their current wishes. You’ll achieve the most tax savings by leaving their IRAs to charity and other assets to their family. New rules on inherited IRAs mean their beneficiaries may face a hefty tax burden, but these same assets can go to charity tax-free.
Set goals for the coming year. As you’re mapping out their savings and investment goals for 2025, take time to consider their charitable priorities, as well. We are happy to sit down with you and your client to develop a tax advantageous strategy for their charitable giving.
Contact us today to learn how we can support you and your philanthropic clients. We’re always available for questions or to schedule a personal consultation – all at no cost.
Contact Monika Collins at mcollins@delcofoundation.org; 610-744-1015