While it may seem obvious when looking for planned gifts, who you’re talking to is really important. That is, the client’s age and their sex should help you craft your conversation for a number of reasons. Women are different than men in their giving and younger people are different than older people in how they approach their giving. It is important to create a different message depending on who you’re talking to about giving. Much has been written about how Millennials are re-shaping giving and, as advisors, we should be paying close attention to our approach to different populations.

Further, different gifts make sense at different ages. In fact, some younger donors may not even qualify to implement a Charitable Remainder Trust (CRT) because the trust won’t qualify under the 10% remainder test. So, knowing your donor’s life stage is not the only important factor. Knowing how each gift works and what applies to who, is equally important. Both Fidelity Charitable and U. S. Trust have conducted multiple surveys that help inform us as advisors. Fidelity finds that women tend to be more committed and strategic in their giving. They volunteer more time, ask more questions about the financial aspects of their gifts and generally feel that giving to charity is a very satisfying aspect of having wealth. Women tend to be more spontaneous; captured by a cause, a movement, or an empathic response.

Parsing even further, Millennials and Boomers are different as well. More Boomers are satisfied by their giving while Millennials tend to want more. Why these reactions occur is unknown but observers of the industry see both Millennial men and women wanting to see results and to measure impact. They desire hands on experiences and involvement, sometimes even leading their own effort ala Zuckerberg/Chan of Facebook fame.

As the Boomers age out of careers, many are finding fulfillment in giving back to their community by volunteering. Also, now that their children are grown and out of the house, if that’s the case, they generally have more capacity to give. Advisors can use this period to begin to convert dormant assets into planned gifts and to also help increase community involvement by providing guidance in this area. One of the key findings in the recent U. S. Trust study is that wealthy Boomers want to give more b ut need help in discovering what they are passionate about. The best advisors know how to help their clients tap into their passion by asking better questions or through other creative processes. While many of these observations likely hold true for other aspects of giving financial advice, it certainly is imperative for advisors to understand their clients’ aspirations and expectations when it comes to giving philanthropic advice. If philanthropy is truly one of America’s great freedoms, then it is incumbent on advisors to empower our clients to best enjoy that freedom. Knowing who they are and what their particular view of the world is will best help to tap into their desire to give. Knowing the best way for them to give based on who they are is equally important. We all have our work cut out for us. This discussion of the demographic aspects of giving is one of the segments of our Free “Opportunity Recognition” video. Click here to receive it.

It is estimated that 30% of families with a net worth exceeding $10 million collect something – be it art, antiques, or classic cars. Often referred to as “passionate assets”, they represent both a challenge and an opportunity for advisors and their clients.

Many enthusiasts don’t think of their collectables as they do other assets – these items are loved, cherished, and coveted. They hold a meaning and identity that is incomparable to their economic value. They are often ignored in the planning process and in discussions with professional advisors.

If you’ve ever been to a classic car show and asked an owner who is proudly polishing one of the 384 Duesenbergs left in existence, and stayed less than an hour, you did something wrong – to put it bluntly. Usually, you’ll get a detailed rundown of its history from the factory floor to present day, sparing no details in between. This is true for most collectors – be it toy trains, Picasso’s or baseball cards.

That visceral connection is what makes planning for the “succession” of the collection so challenging. Yet, plan they must. Is the next generation even interested in the collection? Better find out. Who owns the collection? Better find that out, too. It’s the planner’s chance to make a huge difference in the final value to the family. Do you, advisor, even know if your client is a collector?

Collectibles are considered “tangible personal property” and are, therefore, taxed differently than other capital assets. Long term capital gains tax is at 28%, not 20%, like stocks or real estate – that’s a 40% bump. And, with no deduction for state income taxes under the new law, state income tax is added almost directly to the Federal tax bill. Furthermore, gifts to charity are complicated by the need for a qualified appraisal and the fact that the charity must be able to use the gift for its charitable purpose – for the deduction to be a fair market value instead of the less valuable cost basis.

Proper planning can address these issues, but advisors must first get the attention of the collector before presenting solutions that address their goals and dreams. Keeping the collection in the family can be accomplished only with solid planning – as well as preventing a fire sale to create liquidity to pay estate taxes at the death of the collector.What matters is aligning the clients’ goals for their collectibles with the tools and strategies that will accomplish them.

Do we use a pooled income fund to sell of the collection little by little? Do we transfer to a private operating foundation and endow it with capital to keep the collection in the family? Do we utilize monetized installment sales to defer capital gains tax for thirty years as we liquidate? Any or all of these strategies may appeal to the collector – we need only to open the dialogue that other advisors fail to initiate.

Dealing with collectors and their collections is only one of the aspects we discuss in our Free “Opportunity Recognition” video. Click here to receive it.

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