Chances are, you’ve already begun to notice that a major transfer of wealth is happening as your Baby Boomer clients establish financial and estate plans to pass their wealth to their Gen X and Millennial children.
The dollars involved are eye-popping. Most attorneys, financial advisors and CPAs have seen the Cerulli study’s estimate that $124 trillion in wealth in the U.S. will transfer through 2048. The research estimates that most of this wealth–$105 trillion–will pass directly to children, grandchildren and other heirs. And, notably, the study estimates that $18 trillion will flow to philanthropy.
As the transfer of wealth gains momentum, advisors have a major opportunity to position themselves as trusted experts who can help clients not only structure efficient lifetime and estate gifts to heirs but also help ensure that clients’ charitable wishes are achieved. The Foundation for Enhancing Communities (TFEC) is here to help incorporate philanthropy into clients’ financial and estate plans.
Why this is so important?
There’s a knowledge gap.
Clients may not be aware of the options and benefits of charitable planning. Even many of your affluent clients may still be writing checks to their favorite charities, not realizing that gifts of appreciated stock, for example, can be more tax-efficient and that tools available through community foundations, such as donor-advised funds, can be incredibly useful.
Next-level strategies are key.
Your ultra-wealthy clients will likely need to implement sophisticated strategies for transferring assets smoothly and tax-efficiently. They want to maximize the results of their charitable gifts while also protecting their families’ interests. Leaning on TFEC to help structure gifts of complex assets, such as closely held business interests, can significantly reduce a client’s tax bill and achieve meaningful community impact.
Legacy planning starts now.
It’s tempting to put off addressing a client’s wishes to support favorite charities in an estate plan. “We’ll look at that in a few years,” is a common but less-than-ideal approach. That’s because charitable bequests are best addressed as part of a comprehensive estate and financial plan. For example, naming a fund at TFEC as the beneficiary of a client’s IRA is a highly tax-efficient way to accomplish charitable wishes.
Our Central Pennsylvania team is here to augment your expertise in charitable giving strategies. Not only will you be better able to meet clients’ needs, but you’ll also strengthen relationships and improve client retention. Don’t hesitate to contact our team (philanthropy@tfec.org) and learn how we can help your clients make a lasting impact with their wealth while achieving their financial goals.
