Kevin* recently lost his wife after a long battle with Alzheimer’s disease. Confident he has more than enough money to take care of himself, he wishes to make a donation to the local university where Alzheimer’s research is being conducted.
Issues and Challenges
This was a very emotional time for Kevin, so we first needed to assist him with determining an appropriate amount to gift. Next, we needed to review his assets to determine the tax impact of donating one asset versus another.
We recommended Kevin donate highly appreciated stock directly to the university for credit to the Alzheimer’s research fund in which he was most interested. We also recommended he use the tax deduction resulting from this gift to generate tax-free income for his family in the future. This was an unexpected benefit for Kevin, as he’d normally viewed tax deductions as a means to reducing his current taxes — not as a way to generate tax-free income.
*Kevin is not an actual client, but his story is based upon actual client experience.