Charitable Planning: Special Opportunities

Charitable Planning: Special Opportunities

Article posted in Planning on 12 September 2017| comments
audience: National Publication, Two Hawks Consulting, LLC | last updated: 14 September 2017


We explore opportunities for identifying charitable gifts for those families that have special needs.

By: Randy A. Fox, Editor-in-Chief

Adults and children with disabilities can present many financial planning challenges. But often overlooked by even the best advisors is that a number of charitable gifting techniques present unique opportunities for individuals with special needs.

This can also include families with spendthrift children, substance abusers, or simply those that are not responsible with money – all who should have advanced asset protection planning to protect them from creditors as well as themselves.

For the true special needs client, those receiving Social Security Disability Income (SSDI), it is incumbent on the advisor to be knowledgeable about state law regarding maximum income allowances and definitions. However, in most states, income from Charitable Remainder Trusts, Pooled Income Funds and Charitable Gift Annuities is not counted against the SSDI limitations since it is not considered earnings.

Careful coordination between special needs professionals and advisors is extremely important.

Structuring the type of gift and the appropriate beneficiary of the income interest is vital to the success of such planning. And if applied properly, it can make a fundamental difference in the life of the afflicted individual.

For those that are not receiving SSDI or other government benefits, but who are still facing challenges and who may suffer more from an outright gift of assets, charitable strategies may offer a unique solution. Most of the gifts that would be used under these circumstances provide income at least annually, which is protected from the claims of creditors, and comes from an asset base owned by a charitable vehicle – one that cannot be invaded for principal and dissipated by the beneficiary. No, a CRT will not prevent the beneficiary from remaining a spendthrift, but it also won’t dump a pile of cash into an unprepared lap.

The main motivation for charitable planning should always be to satisfy a charitable intent. However, knowing that there are additional asset protection benefits attached are important elements for advisors to understand. While it may not be the main reason for deploying a charitable tool, it may provide an additional, added benefit that is just enough to convince the donor that he/she can satisfy two goals with one vehicle. There is a surprising lack of knowledge in the advisor community as it pertains to charitable giving and almost an entire void when it comes to the asset protection benefits of various charitable tools. The advisor who becomes well versed in these benefits will have possess a decided edge over competitors. He/she will also better serve the affluent client marketplace.

For those with special needs or the need for special attention, charitable planning can add benefits that will place appropriate constraints on access to principal as well as provide steady income – all the while fulfilling a charitable need of the donor. It is one of the more powerful and untapped opportunities for advisors to explore.

Give me a call at (704) 698-4055 or email me at for more information on how charitable planning can benefit your clients.

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