Nothing is so fatiguing as the eternal hanging on of an uncompleted task.

William James, American philosopher and psychologist

Procrastination is something we are all guilty of and may be a major reason some of your clients routinely put off important planning discussions. Of course, many of those discussions are tax-sensitive, which means year-end can get very hectic for clients who wait.

As the year begins to wind down, consider tapping into your clients’ philanthropic interests as a catalyst to motivate them to start addressing year-end planning items right now rather than waiting until November or December. You may discover that the topic of giving may be an easier conversation that can evolve to include other tax planning topics that need attention. 

Here’s how this could work with a client

–Review the charitable components of the client’s estate and financial plans, including provisions in wills and trusts, beneficiary designations, donor advised funds, prior years’ tax deductions, and historical gifts to favorite charities.

–Reach out to the client to suggest that you meet – or at least jump on a call – to check in on 2024 charitable giving plans and other items.

–Open the conversation by briefly recapping the charitable planning components already in place and the client’s history of giving. Then ask the client about their plans for 2024.

–As you talk with your client about charitable intentions, bring up various charitable giving tools and opportunities that match those intentions. In each case, use the charitable discussion as a springboard for general tax planning items that need to be addressed before year-end. 

–For example, if a client who is over 70½ mentions wanting to support a particular need or organization in the community, you can suggest looping in the North Carolina Community Foundation team to potentially establish a field of interest or designated fund, which can receive distributions from the client’s IRA up to $105,000 annually per spouse. This, in turn, opens the door to discuss Required Minimum Distributions and other elements of retirement planning in general. 

–If the client mentions they are already dreading gathering tax receipts for 2024 charitable donations, suggest that the client consider making a larger gift to set up a donor advised fund at NCCF to serve as a convenient and rewarding hub for charitable giving. Going forward, the client can conduct the bulk of their giving using the DAF and avoid the end-of-year scramble for receipts.

–When your client talks about charities they plan to support before year-end, remind them not to automatically reach for the checkbook. Most of the time, highly-appreciated marketable securities are ideal gifts to a client’s fund at NCCF or other public charity because the client is eligible for a tax deduction at the assets’ fair market value and the proceeds from the sale of the assets will flow into the client’s fund at NCCF free from capital gains tax. Conveniently, the conversation about highly-appreciated stock can segue naturally into a conversation about overall stock positions.   

–Philanthropy topics can naturally lead into even more topics that are sensitive to year-end timing, such as annual exclusion gifts, estimated tax planning, and updating wills and trusts before the extended family gathers for the holiday or travels together overseas.

The NCCF team is here to help you serve your charitable clients every step of the way, every month of the year. We understand that late December transactions are often unavoidable and we’re happy to work with you according to your clients’ schedules, whether that means getting a jump on a new year and processing stock gifts in February, helping you plan in September for year-end, or preparing fund agreements in December.

It’s our pleasure to assist!

This article is provided for informational purposes only. It is not intended as legal, accounting or financial planning advice.