Episode 343: Giving with Purpose - A Guide to Charitable Planning and Donor Advised Funds with Grace Bernhardt

Charitable giving can grow your impact, pass your values to the next generation, and lower your tax bill, but only when the intent to give is genuine. 

Melissa Joy, CFP®, sits down with Grace Bernhardt, Director of Charitable Solutions and Advisor Experience at Raymond James Trust, for a wide-ranging conversation on charitable giving philosophy and the planning tools available to put it into practice. Melissa and Grace walk through the full spectrum of giving vehicles, from private foundations and charitable lead and remainder trusts to the fast-growing donor advised fund, explaining how each structure works, who it tends to fit best, and the tax and legacy benefits each one offers.

The conversation goes beyond the mechanics to explore why families give: using philanthropy to pass down values across generations, preparing heirs to be good stewards of wealth, and building giving strategies around major income events like a business sale, a large bonus year, or an inherited retirement account. Grace and Melissa also share how they each use donor advised funds in their own families, and Melissa reflects on why charitable giving should never be pursued purely for a tax break if the charitable intent isn't genuinely there.

What You'll Learn

• The difference between a private foundation, a donor advised fund, and community foundations, and how to choose among them
• How charitable lead trusts and charitable remainder trusts work, and when each one makes sense
• Why donor advised funds have become one of the fastest-growing charitable structures in the industry
• How donating appreciated stock or other assets, rather than cash, can help you give away a future capital gains tax liability
• How to use charitable giving strategically around high-income years, bunching deductions, and inherited retirement accounts
• How to set up successor donors and legacy giving plans so a donor advised fund can outlast your lifetime
• Why charitable giving should be grounded in genuine intent, not pursued for tax benefits alone

About Grace Bernhardt

Grace Bernhardt is Director of Charitable Solutions and Advisor Experience at Raymond James Trust, where she works with clients and financial advisors on philanthropic planning strategies, including donor advised funds, private foundations, and charitable trusts. She previously served as Director of Sustainable Investing at Raymond James. Learn more about Raymond James Charitable at raymondjamescharitable.org or connect with Grace on LinkedIn.

The previous presentation by PEARL PLANNING was intended for general information purposes only.  No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https...

Transcript

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Welcome And Meet Grace

SPEAKER_01 0:00

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence, and be strategic in order to grow your wealth. As a woman, you work hard for your money, and I'm here to help you make the most of it. Now let's get into the show. And I am thrilled to be joined by friend Grace Bernhardt, who is the director of charitable solutions and advisor experience at Raymond James Trust. Grace, welcome to the podcast. Great to be here, Melissa. Well, I'm an alum of being a Raymond James advisor and still custody assets with Raymond James. So just happen to know a lot of executives there. And I met you, Grace, through women's networks and sustainable investing. Um, but you have a new role now where you're primarily focused on philanthropy.

SPEAKER_02 1:24

Yep. Congrats. So yeah, thank you so much, Melissa. It's been such a fulfilling change and thrilled to be here for a lot of different reasons. But one of the biggest is the opportunity to really help clients and advisors make an impact, like you mentioned, and live out their legacy through solutions like those we're going to talk about today.

SPEAKER_01 1:45

Well, I think that philanthropic planning is not for every person, um, but there are so many people that see the world today and think, I want to make a difference, I want to be involved. A lot of them honor that um that desire through volunteering and giving their time. Um, and then so many people to make charitable gifts, um, whether it's, you know, rounding up at the cash register or big, you know, named gifts at institutions and things like that. And I think we'll talk today. I I just wanted an episode where we could talk about giving philosophy and also some of

Values Based Giving And Family Legacy

SPEAKER_01 2:25

the techniques that are available nowadays in order to give. Oh, I love that. Giving philosophies.

SPEAKER_02 2:31

Let's dig in.

SPEAKER_01 2:32

Yeah. Well, I mean, I think the thing I would start with when I'm talking to someone I don't know well is um to get a sense of of, you know, hey, are you writing little checks here and there? Or do you have the intent to um give back to communities through nonprofits? A lot of people, that's just not top of their list, not family culture. Um, but do you have conversations with in your new role where you're talking to families about how they feel about, you know, philanthropy and and charitable giving?

SPEAKER_02 3:04

All the time. And it's one of my favorite things to do because what we're realizing is clients are better understanding not just the philanthropic impact of their giving, but also as a way to bring in their children, their grandchildren, their nieces, nephews into this fulfilling family legacy conversation, right? So when we're getting together for the holidays or family dinners and conversations, we can have a discussion around what are the values that our family holds near and dear? What type of change do we want to see in the world or what legacy do we want to leave? And then generable giving solutions can be the perfect answer to be able to fulfill those. So, yes, we absolutely do. Um, so that's a lot of times what we lead with is what values come up to the surface for you? Are there any causes that you're passionate about? And then we can discover a little bit more deeply how we can look into solutions like the donor advice fund or maybe starting your own foundation or a charitable trust that um, again, can fulfill that mission. But on the flip side, the tax benefits of these structures are a huge goal uh for a lot of different clients and a great benefit that I know you talk to clients about every day as well.

SPEAKER_01 4:24

That's right. And I, you know, the the point of this podcast is not tax all the time, but those of you that have listened to episodes in the past, I probably don't even talk about it enough. I'm just a big tax nerd. I really feel like the role of a financial planner can um, one of the most predictable ways to influence or impact or add value is to bring advice that's related to tax, not to replace your CPA, not to give tax advice in a vacuum. Right. But um, taxes can be deeply influenced by the way you um use your money. I want, before we go there though, I want to talk about um just briefly, um, one of the things you said, Grace, was that um for families that are looking at their balance sheet, looking at their net worth and saying, oh my gosh, there's more money than I ever grew up with, than I ever expected to accumulate. And someday I'm gonna have kids, whether whether they're my kids' age, teenagers or younger adults, whatever their age is, they're gonna be inheriting considerable amount of wealth. Um, one of the number one places that any expert on wealthy families talks about having um in preparing the next generation is to use philanthropic planning to identify values and also talk about the responsibilities of wealth. So it's just a very common tool that is is proven to be um very impactful in preparing next generations to be good stewards of money.

SPEAKER_02 5:55

That's such a good point. And I think that's of such a common thread with most of the clients we talk about, because especially if their heirs are going to be could uh inheriting, like you said, a significant amount of wealth. Let's get them ready and prepare in like and to start managing that in a way that's responsible, that's thinking towards the future. And one of the best ways to do that, and obviously to have an impact too, is through charitable giving. So you're getting a lot of that values, fulfillment, the tax benefits, but then, like you mentioned, the stewardship. Um, and what we found is next generation is so very open to having that conversation. Our clients and and you all are changing, right? And I think all of us that are shopping for different brands or choosing the music that we listen to, we are very, very loyal to providers that align with our values. So being able to have that conversation, we're all, I joke about this, but it's so true. We log on to Netflix and Spotify and it says, here you are. It's exactly what you might like. So who wants to sing your letters tailored to us? And I think being able to integrate this values and charitable or philanthropic planning

Charitable Intent Beyond Tax Savings

SPEAKER_02 7:15

conversation is just another way to bring that personalization into your finances. So true.

SPEAKER_01 7:22

I guess on the flip side, too, as a um as a just a qualifier in the discussion personally, and this is you know my own bias, but I don't love it when if somebody just doesn't identify with charitable giving in terms of they haven't done it before, it doesn't feel right for them. No judgment on that. But I do not like when you do charitable giving just for the tax benefit, because you know, you have to actually eventually, and we'll talk about when, hand over that money eventually to a charity. So if there isn't charitable intent, um in most cases, keeping the money and paying the tax is you're gonna end up with in many cases, as much or more money. And so don't force it if you're being advised, like, oh, let's do this big, slick, charitable plan that does not feel like you. And so, I mean, I have clients who are both ways. And and if if they aren't, if it isn't, you know, like aligned with how they think about things, that's okay. We should just, you know, maybe skip that conversation and not just do it for the axis alone.

SPEAKER_02 8:29

Completely agree, right? And we have to be uh cognizant of each and every goal and what that looks like. And maybe there are other ways that those individuals are having an impact, and that's great. Um, and anytime we say, you know what, these solutions might not be a good fit, but let's talk about some other areas of the firm that could be a better fit for you and fulfill those financial goals. I think just to sort of tie in one more point here on the charitable solutions, one of the best things is that the assets are not just gone forever and staying at kind of that same cost basis with much of our solutions, those assets are invested in the market and you're able to maximize your giving. So we can we can dig into that a little bit further too. But, you know, I for the longest time was just giving cash or writing a check to charities. And then when I found out that I could utilize a donor advice fund or later down the road, think about a charitable trust to pass on assets to my children and learn that those assets are staying in the market to be able to combat inflation forces. Um, that was such a big benefit that we took into consideration and ended up pretty quickly opening our DAF to get started. But um, that's one big thing that a lot of clients don't realize is that the money is not just gone and it can't grow. That's the whole point of putting it into this sort of wrapper or product solution, is that you can maximize it and grow those assets over time.

SPEAKER_01 10:03

Yeah, there's some really cool

Foundations And How They Work

SPEAKER_01 10:05

and easy functions. So let's let's pivot. So you um work with a product offering through a custodian. Um Raymond James Trust is um not you can tell me, but like Raymond James Trust is a part of Raymond James, which is a custodian or broker dealer, um, both. And um there are giving arms that are often kind of tied to trust companies at you know a lot of different places Vanguard, Schwab, Fidelity, a lot of custodians. There's also um there's like fintech solutions that have um uh charitable giving. Often we've mentioned already DAFs, donor advise funds, which we're gonna talk about extensively in this conversation. And there's also um nonprofit entities or um charitably philanthropically inclined um institutions like community foundations. Um there's all sorts of choices um when it comes to finding um kind of a partner or an alignment um where you can have a charitable account. Um so we'll talk about the pros and cons of them in this discussion, but let's get started. I think like 25 years ago, people would that had a significant wealth would use um a foundation that was like a family foundation. They hired an attorney, the attorney drafted documents, um, and you had it it had its own tax filing um and it's a lot of rules when when it came to how money was um managed and distributed. Um so that is one of the things that you work with, is that correct?

SPEAKER_02 11:53

Yes, yes, it is. Um, and a lot of that remains true. So running a private foundation really is running your own business or running a family business. So there still are a lot of requirements for a foundation. There is an annual tax filing. There's a requirement that you distribute 5% of the assets out of the foundation every year. Um, there is excise tax on income. You do need to have a board, there needs to be governance structures. So there's a lot of work that goes into it. But all that to be said, for a lot of clients, this makes so much sense. But the private foundation, you're able to hire children, loved ones, heirs, former employees into the foundation organization and they can support you in running the governance. Maybe you want to run a scholarship program and don't that's the one I'm most familiar with from the client. Yeah, exactly. Yeah. And so when you compare the donor advice fund versus the foundation, the DAF doesn't allow you to give to individuals or have a personal benefit. The private foundation does. So there's some more flexibility in where you can give from a private foundation. It's a great way, again, like I mentioned, to get the family involved. If you're having family meetings to discuss where do we want to give this year, what types of students or schools do we want to support with our scholarship program? And those can be expenses that are incorporated into the foundation too. So again, some more flexibility, more work, more complexity. You do have to have legal counsel. Um, but we have a pretty significant private foundation business that we support through Raymond James Trust. And we also offer foundation services. So we could take board meeting minutes. We can help you collect those scholarship applications and review them based on your selection criteria. Um, so there's a lot of help that we can provide to clients that decide to go that route. Um, but it is just more complex. Um, and what I really like to see with a lot of the clients that we work with that have a foundation is creating that DAF to be your distribution arm to give you a little bit more time and flexibility to decide where those assets go. At the end of the year, it can be sort of crunch time to get the 5% out of the foundation. If you have a DAF to then receive those assets, there's some more time, flexibility, and opportunity for you to then decide which charities are going to receive those assets. So um, that's another good way to sort of marry two of the solutions.

SPEAKER_01 14:28

Yeah. And I mean, I think um there's a lot of reasons, especially I just think like it probably makes sense in a higher net worth circumstance, uh, not a family with, and this is, you know, blanket advice. So take it with a grain of salt, but not a family with one to five million dollars in assets, more in the $10 to $50 million of assets or even higher, um, where, you know, the the relative pain of administration would be matched to the flexibility that you're looking for or the impact that you're looking to have. Also. And then there's also

Charitable Trusts For Giving Plus Wealth

SPEAKER_01 15:05

um things like charitable lead trusts, where can you just give a like thumbnail of what that looks like?

SPEAKER_02 15:12

Absolutely. And we really like the charitable lead trust as um an opportunity to pass on assets to next generation in a really tax-efficient way and also to give to charities now. So if you're looking to make an impact um with certain charities that you know about, you have a passion for, maybe you're involved in, the charitable lead trust is a great way to do that. So, yes, you do need to get a trust structure created. Work with your attorney to open that um trust account. And then the charitable lead trust can pay out either a unit trust structure or an annuity structure to specific charities over a certain time. So annually you're giving out of that charitable lead trust. The charity is receiving those assets now. But the really neat thing about this structure is that those assets, like I mentioned at the beginning, stay invested in the market. And they can then be whatever is sort of left over after you've given a certain amount to charity, they can be passed to next generation, many times avoiding a state and gift tax. So again, really tax-efficient vehicle. You could sort of have your cake and eat it too of passing on those assets in an efficient way and also giving to charity.

SPEAKER_01 16:23

And again, these both can be initiated today. And I also think there are quite a few from 15, 20, 30 years ago when there were fewer kind of efficient tools that also sometimes are kind of you know still being administered to eventually be handed off at uh a second to deny situation or something like that. So um they tend to have long life expectancy.

SPEAKER_02 16:51

They do. They absolutely do. Um, and if to speak on sort of the other solution here in the charitable trust space, there's the charitable remainder trust.

SPEAKER_01 17:01

Right. Can you describe that?

SPEAKER_02 17:03

Yeah, another great solution, especially for clients that say, I could use some income, or my beneficiaries could benefit from income for their lifetime, for 20 years, say, for a term of a trust. But then I do want to give at the end of the trust to charity. And I want them to be the ultimate recipient of what sort of what's left over. Charitable Render Trust is great for that. So you do have to give an estimated 10% to charity, but you're gonna get that tax deduction at the front of the trust uh creation, if you will, and the account opening based on what's estimated to go to charity at the end of the term. So obviously, the more that you're estimated to give, the larger the tax deduction at the beginning. But again, that charitable remainder trust structure can then generate income for multiple beneficiaries if you so choose over the course of, you know, the trust or their lifetime. The other really unique thing you can do with this is, you know, many families say, Well, I have this significant IRA that I'm going to be passing down to my children. Um, they're gonna be inheriting quite a lot of assets from this account, utilizing a charitable remainder trust to then have the remainder trust be the beneficiary of that IRA. Then you can pay out that income over a longer time period, kind of like a stretch IRA, if you will. Yes, the 10% goes to charity, but then they don't have to empty the account within the generally known 10-year timeframe because that can be a pretty big tax hit. Again, if there are significant assets in the IRA.

SPEAKER_01 18:42

But yeah, sometime I may bring you a client that has exactly that need. And, you know, those the charitable lead trusts, charitable and remainder trusts, I think work really fantastic when you have a really tight relationship with an institution, nonprofit or like a church, where you have, you know, like you'd like to make sure you're taking care of them, but also there is a um a parallel need or desire to help, you know, people important to you.

Donor Advised Funds Explained Simply

SPEAKER_01 19:10

So humans and institutions. Yeah. Um, so fantastic. So now let's talk about um what has come to dominate the charitable space, the donor advise fund, which we've also in this episode referred to as a DAF, just you know, D A F. Um, this is an account, it's an investment account typically, um, that is used and it's very common at all sorts of institutions. I mentioned that earlier, um, that when you put money into the account, you are receiving a tax deduction if you're eligible for a tax deduction, or your your gift is recognized at the time of deposit to the account. Am I right so far? Exactly right. Okay. And then you have the choice. You could turn around right away and um spend that gift with charities. Now you're making a recommendation to a committee, and you can't turn around and ask for the money back. And there is um a board that makes sure that your recommended gift is kosher in terms of the organization as a 501c3 or um uh tax-exempt entity that fits with charitable giving. And um, so there's a process, um, but you can either turn around and all the money can be written to the charity right away, or more typically, gifts are made over time. Um, and there's no requirement that in any given year there's a certain percentage that is given. Is that correct? You nailed it, Melissa. So tell me a little bit about why these have become so chosen, so powerful, so common. Um, give me a little lay of the land about why our listeners may need to know about these accounts.

SPEAKER_02 20:59

Sure. And this is one of the fastest growing structures, truly across the industry as a whole. And there's a lot of reasons, and you mentioned many of them, but it is the easiest way to explain it, like you said, is it's a charitable investment account and allows you a very simplistic and low-cost way to be able to give to organizations that fit with your mission, your values, your goals through a very simplified portal and process. So I think, and you said this too about private foundations 25 years ago, that was kind of the only option, or at least the only known option. And it was, you know, my family really wants to have this lasting legacy and impact. We have to have this business structure so that um, you know, we can showcase that we are charitably inclined and be able to pay out to charities. But the DAF can be uh named anything that you'd like. So if we wanted to be the Melissa Joy Foundation, it can certainly be that.

SPEAKER_01 21:57

So it can look well, you looked mine up because I think we are. The Jeff Heads Let's Enjoy charitable.

SPEAKER_02 22:04

So it can truly function as a foundation. You mentioned a couple of the restrictions there, but they are pretty basic. Um, and it fits with most of the clients that we talk to uh talk to. So 501c3 public charity, uh, the distributions do have to go to those types of IRS status organizations. There can't be any kind of personal benefit. So, say for example, I want to donate assets to be able to get myself a spot to play in a golf tournament. That wouldn't be approved. But if you're donating to the organization that's running that tournament and it's going towards the mission of the charity, great, absolutely, totally um eligible for that donation. Um, we also talked a little bit about foundations being able to run a scholarship program versus a donor advice fund where it can't have that personalized benefit. You can send it to an organization that runs a scholarship fund, but it can't be to a specified individual. So again, really simplistic structure. Um, as long as it's going to a public US-based 501c3, those are most of the time approved. And through Raymond James Charitable, we send out those distributions in typically less than a week's time. So they are quick. It's a great way to be able to support your favorite charities. Um, and you can choose any number of charities that you choose, that you'd like, that you're a part of, or that maybe you just heard about. So it can be something to give you an opportunity to be more of a planned giver, where every single year you have your DAF set up to donate a certain amount of money to these three charities, or you can be opportunistic, like many of us are. We hear about a cause or someone's running a race and supporting this organization. We want to support that in the moment, you can do that too. Very, very simple. Yep.

SPEAKER_01 23:57

I also get, you know, solicitations to make charitable gifts as a business owner of and what I'll say is like, um, hey, I'm I'm not gonna click on the website to put in my credit card. Instead, I'm making a recommendation to

Funding A DAF With Assets

SPEAKER_01 24:15

give through the Melissa and Jeff Joy charitable fund. And um, you'll the organization will be receiving a check within a couple weeks. And then, you know, they still get credit if it's like, you know, the run or whatever. And um, but I am also, it's a lot easier for me to track those gifts, but also in my case, we I donate appreciated stock from my brokerage account into my uh family's donor advice fund every year. And um, so that allows me to give away a long-term capital gain um that I would otherwise when I like let's say if I put in $10,000, if I had um an ETF that I paid $5,000 for three years ago and now it's worth $10,000. And so that $5,000 if I sold it would be a long-term capital gain where I would pay either 15 or 20% in taxes. Instead, I can give away that future tax liability um by giving the stock to the donor advised fund. Um, and then that enhances both um I may be able to itemize my deduction in conjunction with the taxes I pay, the um mortgage interest that I might have, or in some cases for people medical deductions. Um, and I'm giving away a future tax liability. And then I can take cash and repurchase those shares so that I have a refreshed cost basis.

SPEAKER_02 25:43

Yes. And that's exactly the uh the method that we sort of follow for our own donor advice fund, too. And you mentioned stock. So, yes, that is probably the most common asset that we see donated into donor advice funds at Raymond James, but many people don't know that you can also donate more unique assets. So, for example, real estate, privately owned shares of stock, cryptocurrency. Um, we work with a third party called Charitable Solutions that specializes in liquidating those types of assets to then they take care of sort of the liquidation and the logistics of moving that into our donor advisement that's then allocated to your account. So that's an option too. Yes, you can give cash, yes, you can give stock, but then keep that in mind that there is the option to get some other more unique and appreciated securities or assets off the books.

SPEAKER_01 26:38

That's really interesting. How does an organization like Raymond James Trust get paid for the um charitable funds and what donor advice funds? And what questions should you ask when you're, you know, kind of researching the different options?

SPEAKER_02 26:54

Good question. Yes. So Raymond James Trust, well, Raymond James Charitable is a client of Raymond James Trust. So because we have a large team, um and I'm sitting here in the office, so I have an incredible team that sits right out here in this space. Um, so we get paid for administering these donor advice fund accounts. That means we're receiving contributions into the donor advice fund. We're running the due diligence on charities to make sure that they are upstanding, that they still have the same IRS status. Um, we're also sending out those checks to charities as well. We're opening what's called sub accounts to ensure that your account is set up in a way that it's invested based upon your objectives. So we charge an administrative or administration fee through the charity to be able to run those accounts. So the fee structure, as you can probably imagine, as assets increase, then the fees go down. It's sort of a the percentages, right? Exactly. So it's a tiered fee schedule. So as your account continues to grow, then um, you know, that fee could potentially decrease over time.

SPEAKER_01 28:03

Yeah, and there may be compensation to advisors that match up with the organization. We rebate ours because of the structure that we have and just our preferences, but a lot of times there could be compensation, but that would be similar to how you're paying for your investment advisory relationships or might be lower. Um, and then there are often um uh kind of models that you can choose for how you're investing. Um, I use an environmental social governance focused model um that for our charitable fund. Um, but you can have those assets grow because, like in my case, we make um gifts that are uh a little bit bigger in than our annual gifting out of the fund. Right. Um still giving um significant amounts. Um, but my kind of um mentality is since I'm in a business that's very tied to how investments work, is I'd rather give more in years that um uh markets are good so that I'm building up reserve and I don't have to lower my gifting in years that um my business is less profitable because yes are down. Um so I, you know, can kind of pre-prepare for whether it's um giving during um these years, but also in retirement when maybe I don't have as much cash flow coming through and I'm not like, hey, how can I um lower my taxes? Maybe my taxes are already lower than I have um grown, you know, the um pool or the the treasure chest of charitable giving that I'm able to write checks from or recommend gifts so that checks are written to charities. I love that. The treasure chest. That's what we're gonna call it going for. I'm sure compliance will love that. I was just thinking about doing the compliance review participants.

SPEAKER_02 29:53

Well, it's a really good point. And like you mentioned, the donor advice fund doesn't have the requirement that you're distributing any certain amount in a certain time either. So um, if you choose to leave those assets in vet invested in for the term of your lifetime and then to bring on a successor, um, donor advice advisor. I know we wanted to talk about this too, but um, you can choose for the next generation to then choose where those gifts go. Yes. Or you can select specific charities uh to be the recipients of the balance of that account or a certain percentage over time. So lasting legacy with the donor advice fund is also available. It doesn't have to end um and it doesn't have the requirement to then send out a certain amount.

SPEAKER_01 30:43

Well, and in fact, if you're listening and you're like, oh, this is old hat, I have a donor advice fund. Um, do you know that it's important, like just like you have a beneficiary designation for your retirement accounts and you have maybe a trust for your taxable accounts, that you there are forms that were less like pushed through in the early years of donor advice funds that you where you can say, hey, here's the people who are in charge. And in some cases, it's one person, it might be a friend of the family if they don't have kids themselves. A lot of times it's the next generation. Um, or you can say, like this particular organization gets what's left. Um, if I if I die tomorrow, then you know, I want to leave a legacy here or there.

SPEAKER_02 31:26

Yep, that's a great point. And and we have a two-year-old, so she's not quite ready to make this decisions, but um, so we've selected a couple different charities to receive a certain amount until the assets run out, right? As we mentioned, they're invested in the market. So hopefully those continue to grow for perpetuity.

Investing Legacy And Tax Bunching

SPEAKER_02 31:45

And then when our daughter is of age, then we'll bring her in uh as a successor genre as well.

SPEAKER_01 31:51

Yeah. And I would mention, you know, just to think about a few times where this really um is important, you know, if you're writing checks every year, then I always want to talk about like, is there some advantage if we were to use something like this? Because one of the great strategies you can use is to bundle your charitable contributions in higher earning years, or if you're just not hitting the standard deduction because it is higher for married family married filing jointly, it's you know, it's 30,000 plus. Um, so if you're looking and you're just like not typically able to itemize, well, it may make more sense to do three years worth of giving um in a particular year. So you, you know, kind of bump up into itemizing every few years or something like that. And if it's the last year you're working, you're getting ready to retire, but you'd always written, you know, several thousand dollars of checks, um, but it's gonna be a while before you have your qualified charitable distribution at age 70 and a half, then you may do a big gift that last year. So you can keep doing the giving you were doing in the past, but you were able to take advantage of your last high tax bracket year. There's so many different ways to think about it where your personal circumstances are relevant and it's you know, blanket advice or just reading an article that isn't personalized to you may not be the greatest fit, but just keep those ideas in mind.

SPEAKER_02 33:17

Great ideas, Melissa, and a good way to sort of incorporate that into their overall holistic planning. The other thing to think about too, if if maybe you're straddling income tax brackets, right? Look and see by how much, and then can your donation sort of move you into that lower bracket that you're just right on the edge of as another strategy to again utilize the tax benefits of these structures.

SPEAKER_01 33:44

For sure. And then uh also like there's there's times whether it's a big windfall, you have to take out your and one of the big things we're seeing nowadays is you you you have 10 years to empty an inherited retirement account. Um, and you know, some of those years can get really high in the taxes if it were a larger um 401k or IRA that you're emptying that you inherited. Um, that can be a good time to think about it. Definitely if you did have a transaction like a business sale or a windfall like lottery, then you know, that tax year may be the one that matters most because you're um at a much higher tax bracket than you typically are. Again, like if you're not charitably inclined to begin with, don't go and do a boatload of charitable giving that you're like, I'll find a way to get it back someday. That's not gonna happen. Um, but this is a great time to say you could fund multi-year or really expand um your personal commitment and amplify things. And one of the things that we're planning to do at our firm is is to have a um donor-advised fund for the company as well that will just fit in with our kind of commitment to community and and um the causes that we care about as a team. So there's so many flexible and creative ways to incorporate this into your planning.

SPEAKER_02 35:05

That's no surprise coming from you, Melissa. But yes, business and corporate DAFs are such a good way for your your practice, your organization to have an impact and also bring in your staff.

SPEAKER_01 35:18

Yeah, right. Just like your kids can be held.

SPEAKER_02 35:21

Absolutely. Yeah. Um, so I love that solution and and that's so great. I can't wait to see it get started and what impact you have.

SPEAKER_01 35:28

Well, hopefully we'll be able

Choosing A DAF Sponsor

SPEAKER_01 35:30

to announce it by the end of the year. That's what I'm thinking. So um, can you talk a little bit about why, like what you should consider when you're choosing, you know, Raymond James Fidelity, um community automation? Yeah.

SPEAKER_02 35:45

Yes. Yes. So depending upon what your goals are for your giving, and I know we've talked a lot about this, but what um, what sort of resources and support are important to you? So we talk a lot to clients about well, I have a really strong community foundation that's run by, you know, maybe folks that I know. Community foundations are fantastic for those that maybe just want to have more of a localized impact, right? And they want to be very ingrained in projects or initiatives that are happening within their city, within their town and their county. Uh many times fee structures are very different. They might not be as simplified as working with a national DAF sponsor like Raymond James Charitable is. Um, but that's just another consideration. When it comes to overall service and support, like I mentioned, we have a very large team that um administers these donor advice, fund accounts, private foundations that can support you. So you're never gonna call us and get bumped to a phone line. You will get a person that you can chat with about your situation, what questions that you have will help walk you through every step of the way. So I think a lot of times that personalized support is very important to a client where they say, well, maybe I want to give to a national footprint charity and then also give to my smaller local organizations that I know about. So sort of marrying that larger, more global scale giving and footprint um with more of the smaller organization maybe that just started in your city or town. You can do that through a national, um, like a Raymond James charitable. Um, so it's just different. So I would say, you know, think about the costs that are incorporated in starting up your donor advice fund at any platform that you're considering. Think about the support that you'll receive. What investment options do they have to offer? Um, so we didn't talk a ton about this, but there are, and I know you teed this up, we do have mutual fund models called Liberty Models that are run by our group of portfolio managers and investment officers within the trust based upon your objectives that you can opt into. And then at a certain asset level, your financial advisor can manage those assets as well in a model or in a separately managed account. So we have a lot of options and flexibility for again the objectives and the goals for your giving. And that's another consideration that I would take into account when you're selecting from platform to platform or community foundation versus more of a national DAF sponsor, like we are.

SPEAKER_01 38:36

Yeah, and I can say I have experience with all of them, um, not all of them, but I like with different pathways. So we're multicustodial, um, manage a lot of assets with most of our assets with Raymond James, but also Schwab and Fidelity. So I have experience with all three in terms of donor-advised. And then I have many clients who have close connections to local community foundations. And so in those cases, even um the advisor can actually be oftentimes linked so that we can assist with the donations, keeping track of um, you know, charitable gifts. So all of these are services that certain wealth managers do, including taking you through the whole pathway of like, hey, I don't typically recommend foundations, but based on what you're describing, that might be the perfect fit, or let's talk about the charitable remainder trust for the beneficiary designation, um, you know, all of those sorts of things. Um, I I could talk about this topic all day. I will deep hear the uh enthusiasm I have because I think so many charitable entities are doing exceptional work. They're they're um filling in where social service social services, arts and culture gaps exist. Um, and so there's just um the extraordinary opportunity for people that that feel like similarly to us, Grace, to have an impact and sometimes dream bigger with the right advice.

SPEAKER_02 40:06

Absolutely agree. And I think that advisors like yourself and wealth managers across the industry that are offering these services are just adding even more

Resources Contact And Closing

SPEAKER_02 40:15

value to individuals and families and helping them to live out their legacy. So, of course, myself and my team are always available. Um, if anybody on the webinar Where can they find you, Grace?

SPEAKER_01 40:28

Or where can they find Raymond James Charitable?

SPEAKER_02 40:30

Yes. So we do have a website that has all of the information and also has our annual report of the impact of our clients giving and some of the specific stories that you might want to read into of how we've been able to support those organizations and missions across the country, really. Um so rjcharitable.org is available. It's our public-facing website. We also have quite a few resources that I'm happy to get into Melissa's hands to get into your hands as well. You can always also reach me at grace.burnhart at raymondjames.com.

SPEAKER_01 41:06

Perfect. Well, like I said, we probably left some unsaid because the having a time limit for a topic like this, there's never enough time. But I really appreciate the primer and I hope hopefully we sparked um some interest and conversations. Um, it's never too late to express your charitable intent, and I'd welcome the conversation myself if if if you feel it's so inspired. Thanks again, Grace.

SPEAKER_00 41:43

Thank you for listening to the Women's Money Wisdom podcast. If you found value in this episode, the best way that you can support the podcast is to forward an episode to a friend or leave a review. Go to ProPlan.com and the podcast link to get all the resources and links mentioned. This presentation by Pro Planning is intended for general information purposes only. No portion of this presentation serves as the receipt of or substitute for personal investment advice from Pro Planning or any other investment professional of your choosing. Copies of Pro Planning's current rent and disclosure brochure and form CRS discussing our advisory services and fees are available upon request or on our website platform at PerlPlan.com. The information that we share is meant to educate and inspire, not serve as personalized financial advice. Everyone's situation is unique, so be sure to consult with your own financial professional for guidance that fits your life. And just so you know, the opinions shared in this podcast are Melissa's own and those of her guests. They don't necessarily represent any organizations with which Melissa is affiliated. For more important disclosures, please go to our webpage at proplan.com.