hi i'm brad rossi thanks for tuning in today to my channel i'd like to talk to you today about
something that i've gotten up and started here for myself as i normally do i eat my own cooking most
of stuff i tell my clients and my watchers about my listeners about is strategies that
i'm currently doing well the latest strategy i've started to do for myself my own family
is called donor advised funds have you ever heard of a donor advised fund
chances are you only would have heard of those if you had done some research
donor advised funds are simple and convenient and can really help you a lot with your taxes
when it comes to giving to qualified charities let me just say right off the bat that if you
are not watching this for yourself or someone else that's interested in making significant charitable
gifts or possibly giving a gift or gifts at your death this video might not be for you
but if you are an annual gifter or someone that may want to leave a larger amount of money
at your desk well this is a great great video the topic again donor advised funds i'm brad rossi
don't forget to click the like and the subscribe button please as i have a ton of videos about
tax planning and retirement planning especially so if you find yourself in a position
that you are claiming the standard deduction and would like to use your gifts towards
the itemized deduction list but maybe you don't give enough in a certain year in order to do that
that's where the donor advise fund might come into play this is one of the many areas the reason that
is when you gift to a donor advised fund which can be set up at many different brokerage accounts
okay it's just the name not just your name but in the name of your family donor advise
fund for example mine is the rossly uh the rosley charitable giving fund is what i happen to name it
so what i do is you you cluster your gifts you make one big gift throughout the year although
you can make your gift any time actually you can give to it and then i maintain the control over
when i send out the money so i may put a lot of money in there in one year for the purpose of
making it available to be itemized because maybe without
if i don't bunch up the charitable gifts into one year my itemization turns out to not be favorable
and i'll just take the standard deduction so literally let's just say you were going to give
5 000 a year to your church just to make up a number well one way to do that but you don't
but you don't get enough itemized deductions to make it worthwhile to use anything other
than the standard deduction what you might do is to say put three years worth of your
your anticipated church contributions three times five thousand or fifteen thousand dollars
into a donor advised fund now for tax purposes in the year you did that you get to use fifteen
thousand dollars as a charitable gift even though you might just give five thousand
dollars of that in the current year to the church five thousand dollars the next year to your church
out of the same account and five thousand dollars the following year and you do that again so that
you can bunch your deductions your contributions into one year now how do you make contributions
well you don't have to make them just in cash as a matter of fact if you have appreciated stocks or
mutual funds or exchange traded funds or something else appreciate securities there's a really
good benefit of donating those to your donor advice fund and the benefit is let's just say
you were lucky enough to buy a hundred shares of tesla and you paid ten thousand dollars for
those shares and now those shares are worth fifty thousand dollars well you could sell the stock or
some portion of the stock and you could be stuck paying the capital gains or or you could give some
shares or all the shares to your donor advise fund you transfer them in there without selling them
now the donor advise fund sells them enjoys the profit without having to pay any capital gain tax
and then you now have cash or you can reinvest the money if you want to invest it and allow
that money to grow or you can give it out as you choose excuse me you can give it out as you choose
so a d so the donation of appreciated assets is a fantastic benefit of a donor advised fund
because the advised fund will pay the tax by the way unlike setting up a trust
there's no real fees to set up a donor advise fund it's a
it's a special account application at your brokerage firm okay so it's not hard at all
one of the neat things about avoiding that capital gain taxes let's say you were going to donate ten
thousand dollars but if you had to sell the stock yourself and you had a serious appreciation you
might have to sell twelve thousand dollars worth of stock paid two thousand dollars in capital
gains tax to end up with ten thousand dollars to give to the charity or charities of your choice
but since you don't have to pay capital gains tax if you make the gift directly to the donor advice
fund you don't have to give 12 000 less than 10 you can gift only 10. so saving that capital
gains tax is huge and depending on what happens in the next tax law if there's a big change made
they could be taxing capital gains even more which would make this even more attractive
now one of the other benefits about these donor advised funds remember when i said about for
example giving say three years worth of donations to the charitable donor advised fund what happens
to the money if you're not gifting it all in that first year what happens if you put 15 in but you
only plan to to give away five this year and five next and five at following well you could invest
that money into basically anything that you could invest with a brokerage account money so you could
invest you could turn around sell the tesla stock in my example and if you wanted to you could buy
it back inside of the donor advice fund and then next year or the following year or 10 years later
you can sell whatever stock you want to sell not pay the capital gains tax and give it away
it's quite possible that you could get even a larger sum of money what happens if you only
have a few years left to work and you want to make large donations to help you with your current tax
bill so that you don't have to sell any of the stocks and pay capital gains but you want to
make gifts well you can make these contributions to the donor advice fund
and once it's in the fund inside a brokerage account your family charitable giving fund or
whatever you like to call it you can have a portfolio in there and you don't have to
do anything as far as future gifts maybe your purpose is not to gift annually somewhere but
to make a significant charitable contributions to as many organizations as you choose at your death
so maybe you're going to live for another 20 years or more and that money whatever
you gift into that donor advice fund is allowed to grow forever without paying tax until you die
what happens when you die guess what it doesn't have to all be gifted then i had a client recently
where we transferred some really significantly appreciated exchange traded funds that we love
because they did great sold some of it to make a current gift but allowed the left the rest of it
in the account to keep growing and in doing that what we did was we're going to have a future gift
and if my client doesn't distribute all that money while she's alive her two sons are going
to become the successors on that account and they will decide when and how that money is donated out
to whatever charity they deem worthy so it's a really neat thing my client felt great about
giving her children some say in how that money might be distributed also put a charitable mindset
into their hearts if they didn't already have them which they actually do of course so these are a
couple of things that you can do with this donor advise fund i have a spreadsheet available for
you as a pdf that reminds you of who this makes sense for and how this might work best for you
feel free to email me if you'd like a copy of this brand of fortunefinancialgroup.com is my email
and i'll send you a copy and a pdf if you'd like help with how to invest this money i can do that
as well and how this works my company's fortune financial group i'm in in florida
and in illinois at this point but i work with clients all over the country so if you'd like help
with this type of planning field please feel free to look me up you can reply to this this video
and get a hold of me fortune financial group's my company make sure to subscribe
too and give me a like if you liked the video thanks a lot for listening have a great day