Evergreen planning techniques: Helping charitable clients despite tax law uncertainty

Watching for signs on what might happen with the Tax Cuts and Jobs Act is creating a lot of tense moments among attorneys, CPAs and financial advisors. As tax professionals, an ever-evolving regulatory climate requires almost daily tracking to catch the most up-to-date predictions, keeping an eye on the estate tax sunset in particular. But the uncertainty shouldn’t stop you from working with your clients on their charitable giving plans. Here are three techniques for working with philanthropic families that are important to consider, regardless of what happens with the estate tax.  

Pair up a designated fund with QCDs for clients over 70 ½. 

If your client has supported a particular charity for many years, intends for that support to continue, and also wants to be sure that the funds are used effectively, a designated fund at the Community Foundation for Greater Atlanta could be the perfect fit. Your client can make tax-deductible gifts–during life and through estate gifts–that are set aside to be used exclusively for a particular organization. The Foundation makes distributions from the fund according to the client’s wishes. An advantage of a designated fund is that the assets are out of creditors’ reach if the charity were to run into financial trouble. Plus, a client who is 70 ½ or older can make Qualified Charitable Distributions up to $108,000 in 2025 from IRAs to a designated fund. 

Help clients deploy their retirement accounts to leave a legacy.

If your client intends to provide for charities in an estate plan and owns an IRA or other qualified retirement plan, it’s a good idea to explore the possibility of naming a fund at the Foundation as the beneficiary of that plan. Your client achieves extremely tax-efficient results. Certainly estate tax is avoided on the retirement plan assets flowing to the charitable fund, but even if estate tax is not an issue for the client, income tax is also avoided. Indeed, the income tax hit on retirement proceeds left to heirs can be steep. 

Consider a donor-advised fund.

Especially if your client supports many different charities every year, a donor-advised fund at the Foundation can be an excellent tool to help a client organize their giving to favorite charities, such as local organizations, places of worship, and an out-of-state alma mater. Clients appreciate how easy it is to support multiple charities while the Foundation’s systems keep track of everything. Plus, clients can give stock and other appreciated assets to their donor-advised funds, often avoiding capital gains tax and simplifying tax receipts to provide their accountants when tax time rolls around. 

As always, our team is here to assist! We look forward to working with you and your clients to support the causes that mean the most to them.