Establish a gifting strategy while you pull your taxes together

This is the time of the year when many clients are pulling together their tax documents. It’s also an opportunity to establish your gifting strategy. These five steps will help you think through how much you can give and to whom – and how your decisions will affect your family members.

  1. Meet with your professional team
    Gather with your tax accountant, investment professionals, attorney and others who contribute to your financial success, and start putting together the plan for the coming year. Setting a gifting goal will help you and your team focus your efforts to minimize your tax burden and maximize your gifting.
  2. Convene with your family
    Make sure everyone is on the same page with items such as educational expenses and events such as weddings, graduations, or other significant occasions. Additionally, consider how your children and grandchildren may assist in your philanthropic plans and donations.
  3. Determine your charitable giving strategy and budget
    Is there a particular charity you plan to support? A particular area of focus? The next step is to determine how much you want and/or need to give away. Having the expected budget set up early will make things much easier come year end.
  4. Create or fund your philanthropic vehicle
    Families often rush to set up charitable vehicles in December, when this could be accomplished early in the year. Even if you are not creating a new charitable fund, consider 2015 funding of your existing vehicles to ensure maximum impact.
  5. Align family member gifts
    Determine the gifts you’re planning for this year and get them off your balance sheet early. By making the gifts early you can remove the assets’ future income and appreciation from your balance sheet, too.

The more you can take care of now, the less stress you’ll face later. Seize the opportunity to put your gifting strategy into practice now.

Doyle Butkiewicz is Milwaukee market manager for J.P. Morgan Private Bank.

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