How To Define A Legacy

OUR APPROACH TO GENERATIONAL PROSPERITY

We know you work hard to build a legacy that extends beyond yourself. Executed with intention, your financial plan forges a path to something greater – a better life for your family, security for the next generation, lasting support for a meaningful cause. When approached with the right plan, generational prosperity becomes the gift that keeps on giving.

A family recently came to Vance Wealth looking for a way to create just that. “I first met with the Thompsons during a year when they had an abnormally large capital distribution, an income anomaly that likely wouldn’t happen again,” explained Jerrod Ferguson, Vice President of Vance Wealth. “We wanted to create a plan that was in line with their long-term goals, while also saving on taxes where it made sense.”

Jerrod started by assessing the Thompsons’ long-term philanthropy goals, asking them how much they wanted to donate each year and projecting it over a 20-year period. Based on the growth potential of the account, Jerrod determined the ideal amount to allocate toward a donor-advised fund, which would allow the Thompsons to donate a large amount and take the tax write-off today but disperse the donations to charities over time.

“We took care of the next 20 years of gifts, and they got the tax deduction in a massive income year,” Jerrod explained. “But we actually noticed another opportunity to reduce their tax liability.”

The Thompsons had appreciated assets in a brokerage account.

“You can actually fund the donor-advised fund with appreciated securities, and when you donate appreciated securities, you’re gifting away a future tax liability because it has unrealized gains. So now you’re getting the deduction for the full gift, and you’re also gifting away a future tax liability. The donor advised fund is invested in a professionally managed, well-diversified portfolio, with the intention that the money continues to grow.

Another benefit to the donor-advised fund is the option to name a successor donor, and in this case, the Thompsons named their children. If there’s still money in the fund when they pass on, their children can continue giving to a charity that means something to them, too.

“It’s the gift that keeps on giving, to everyone involved,” Jerrod shared.

Many of our clients are starting to involve their children earlier and earlier, when it comes to the decisions surrounding their legacy, and we help facilitate those vital conversations with the next generation.

“But no one client is the same. How we choose to define our legacy is different for everyone. There’s no one set way to go about this because, at the end of the day, the client is going to tell us how they want to approach their legacy – and that’s kind of the fun part about it,” Jerrod shared. “That’s why it’s so important that we ask the right questions, learn what’s important to you, and facilitate these crucial conversations. We can suggest different approaches, but it’s our client that calls the shots.”

Ready to explore your legacy strategy? Let’s start a conversation today by booking an appointment or take the time to download and complete this worksheet with your loved ones. It’s a simple but powerful way to honor your family’s legacy and create a shared understanding of what matters most.

Disclosure: In order to protect the privacy and confidentiality of individuals involved, certain details within this case study, including names and specific identifying information, have been altered or fictionalized. All efforts have been made to maintain the accuracy and integrity of the presented information while ensuring the anonymity of those involved. The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.