Friday, November 16, 2007

Brokers are talking up charitable giving

Philanthropy is a core element of wealth management for most families. Registered Rep magazine reports that more and more brokers are recognizing that fact and discussing the subject with their clients. According to a survey done by the magazine with Schwab, some 79% of brokers say that they will talk about philanthropy, though a much smaller number feel comfortable initiating such discusssions.

What would it take to get more brokers to break the ice on charitable giving topics? This graph tells the story (click to enlarge).

The wealthier the client, the more important a role philanthropy is likely to play. And at higher wealth levels, charitable trusts are playing a big role, according to the study.
Elaine E. Bedel, a fee-only financial advisor with Bedel Financial Consulting in Indianapolis, says her background working in the trust department of a bank gave her the knowledge to speak confidently with clients about charitable giving. It’s usually a discussion that takes place in her initial meeting with a client, she says.
What if the client isn't charitably minded?
Raymond F. Rivas, a financial advisor with Atherton Wealth Planning in Atherton, Calif. says, in fact, that he takes a rather blunt approach. “I usually say, ‘Look, you have a lot of money here. What are you going to do for others? You have two choices when you pass away. Are you going to give your social capital to the IRS, so they can decide how to distribute it, or are you going to take your social capital and decide yourself how to distribute it among your fellow Americans.’”
That's been Jim Macdonald's defense of the unlimited charitable deduction—who wants to let Washington spend the money? But they keep spending it whether they have it or not. I'm wondering whether my taxes might go down a bit if we share some of the charitable largess with the IRS?

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