Why Have a Generosity Strategy?
We have clients who believe “giving back” is a value and a goal for their financial futures. Whether they have a modest amount of wealth or an abundance, giving back — to their communities, church, charitable organizations, or other philanthropic endeavors — is on their minds. Being generous provides many people with a sense of well-being we all strive for and enhances it, giving us reasons to be optimistic and hopeful. Let’s look at a few practical steps you can take to help others and maintain this sense of optimism and hope.
There are three primary reasons for having a “generosity strategy.”
Care for others
As we have already pointed out, giving to others through charitable organizations, churches, or similar causes provides a healthy expression of caring for others. Psychologists tell us that the act of generosity releases dopamine in the brain. Dopamine is a neurotransmitter linked to happiness and reward, creating a sense of joy and satisfaction. Who would have thought the simple act of giving could be so beneficial to your health?
Minimize Tax Liabilities
Another compelling reason for a “generosity strategy” is its potential to strategically minimize your tax liabilities. For those with qualified itemized deductions, your giving might significantly reduce your family's tax liability. IRS rules allow gifts of cash or appreciated stock to lower your taxable income if you are an eligible taxpayer.
Minimize Taxable Liabilities on Estate
Finally, for families planning to bequeath accumulated wealth, a “generosity strategy” can be a straightforward way to reduce the taxable value of their estate. While estate planning can be complex, families can use many simple strategies to reduce estate tax exposure.
Generosity can be a powerful force for good in a world with seemingly endless needs. Philanthropy can benefit both the giver and the charitable entity that receives the gift. We also can see that releasing assets today can extend your generosity over many generations, creating a family philanthropic legacy for decades.
If you have further questions regarding end of year giving, or if you would like to discuss why a generosity strategy may be right for you, connect with one of our advisors today.
The material has been gathered from sources believed to be reliable, however West Michigan Advisors cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through West Michigan Advisors. Advisory services are only offered where West Michigan Advisors and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place.