Follow the Process: Complex Assets in Legacy Planning
In more than 30 years as a Thrivent representative, Paul Dahlgren has seen many clients reach the top of the financial pyramid. When that time comes, Paul says, “It’s more important than ever to follow the Advisory Process. There’s nothing magic about it, other than being alongside members and helping them identify their goals.”
When clients start talking about a legacy, Paul introduces them to InFaith Community Foundation. He says, “For people who do this kind of planning, it’s about making a difference and being good stewards. InFaith can be part of that process.” The financial consultant has worked with InFaith since establishing his own donor advised fund 20 years ago.
The giving process can become complicated if clients wish to donate complex assets, such as property, privately held or closely held stock, farm equipment or crops, limited partnerships or more.
Paul has facilitated a few gifts of real estate with InFaith over the years. Recently, a client retired from the successful construction company he started decades ago. “There were complexities in his portfolio with the properties owned inside his company,” Paul says.
The solution for this client was to create a donor advised fund with rental property that was held tax-free inside the fund. The donor can then designate support from the proceeds to his church and meaningful charities as he chooses. His two children will serve as successor advisors to the fund after he passes away. “It’s his legacy to the next generation of giving,” Paul says.
Properly structured complex gifts may provide significant tax advantages. Donors may be able to deduct the current fair market value of their property. This deduction can be taken all at once or, if unable to use the full amount due to AGI limitations, the donor may carry the unused portion over for up to an additional five years. They may also avoid capital gains taxes on the assets, many of which have likely been held for years and are highly appreciated.
“It’s not the tax savings that drives the decision. It’s the desire to be generous,” Paul says.
Paul uses InFaith’s Real Estate Questionnaire to facilitate conversations with his clients. “It’s important to use their tools and let them lead,” he says. “InFaith is the expert, and it’s a good reflection on me.”
Get Started. To learn more about InFaith or consult about specific clients, call our gift planners at 800-365-4172.