Rather than imagining what your gift can help accomplish in the future, imagine the joy of seeing what it can accomplish during your lifetime.
Most clients come to the estate and legacy planning process with hopes, promises, and ideas described in future tense. Conversations revolve around providing security and opportunity for their families, support for people or causes they believe in, and developing financial strategies that may help optimize the impact of their gifts. Somewhere down the line.
But there can also be value in considering gifting in the present tense – reaping the emotional rewards of seeing the impact of your gift, firsthand, now, during your lifetime.
The concept of warm giving isn’t new. Like most people, you’ve probably already given to your children, charities, folks in need, and others in informal ways and fundraisers. A little here and a little there. But you may want to consider possibility of more significant, more formalized giving, which, in turn, may create more significant and personally gratifying results.
Client Families Have Told Us Their Stories.
During the Covid years, a client couple wanted to make significant gifts that would help “recession-proof” their three adult children.
By personally delivering $250,000 checks to each of the kids, they achieved their intended effect. All three were able to pay off their mortgages. On a side note, one daughter and her husband bought a furnace for a needy neighbor family, paying forward the generosity they had just experienced.
More recently, a client couple made sizeable gifts that helped their children to buy homes and establish firm financial footing. Through careful planning, they were able to do it in a tax-advantaged way.
Another couple gave their young adult children the gift of a financial planner, realizing the compounding effect that can be achieved by engaging experienced financial guidance earlier in life.
Still another client made a major gift to a local charity this year, so he could follow along as his donation funds an important new facilities construction project.
Potential Benefits of Warm Giving
When giving to Children:
- You could see how your gift helps your children or grandchildren, whether it’s buying a house, starting a business, or paying for college.
- You could offer advice or guidance as they make decisions related to your gift.
- You could test legacy and estate planning decisions by seeing how responsibly they manage financial gifts and stewardship.
- You could strengthen family bonds, creating a stronger sense of connection and shared purpose with the family.
When giving to Charities:
- You could see the direct results of your donation, whether it’s a specific project or support of the organization’s mission.
- You may be recognized and appreciated during your lifetime.
- You could be sure your donation is used as intended and have a say in its application.
- Considerations When Thinking About Warm Giving
Your own financial security. Take time to review both your current financial situation and long-term plan. Ensure that gifting is unlikely to compromise your financial well-being as you age or if unexpected expenses arise.
Emotional impact. Family dynamics may be a risk if you have multiple children or heirs.
Tax impact. Your tax and advisory team will be able to help you assess the tax implications for both you and the recipients of your gifts.
Warm giving may make a tangible difference in the lives of loved ones and the future of causes you care about, while enabling you to experience, firsthand, the joy of watching your gift in action.
