A plant sprout grows out of a jar filled with coins

It’s not too early for financial spring cleaning

If you are dreading pulling together receipts and other documents for 2022 tax filings, this may be the perfect time to take proactive steps to get organized for next year. 

When it comes to charitable giving, managing your giving through Rose Community Foundation can make your life easier. Establishing a fund at the Foundation is an easy way to organize and track your charitable donations, with the option to make a single tax-deductible contribution each year to be added to your donor-advised, field of interest, or other type of fund.  

An especially tax-savvy technique is to make this contribution using highly-appreciated stock. After the stock has been transferred to the Foundation, the proceeds from the sale of the stock – free from capital gains tax – are then used for distributions to support your favorite charities. Regardless of how many different nonprofits receive support from the fund, you only need to keep track of one receipt for income tax deduction purposes. 

Gathering up receipts for charitable donations may inspire you to organize other aspects of your financial life, including estate planning. Make sure you are aware of the meaning and importance of elements in estate planning, such as:  

  • The difference between a will and a living trust and how charitable wishes fit in to these documents. 
  • The importance of being intentional about how every asset is titled so that the assets actually pass as intended (making a comprehensive list of assets is a good starting point). 
  • The dangers of hurriedly filling out life insurance and retirement plan beneficiaries and why these documents are critical components of a financial, estate, and charitable plan. This article references a case questioning the decedent’s IRA beneficiary designation, ultimately ruling in favor of the beneficiary.   
  • The reasons to have both a “living will” and a durable power of attorney, both of which (or the lack thereof) have a major impact in the event of incapacity. Some individuals prefer to use a document called My Five Wishes for end-of-life planning.   
  • The need to confirm that someone in your family knows where to find a list of logins and passwords. 

Charitable planning is one of many steps in your estate planning process, but it can be an excellent catalyst to complete a comprehensive estate and financial plan. 

Rose Community Foundation’s philanthropic services team welcomes those broader conversations around lifetime and legacy planning, including membership in the Rose Community Legacy Circle. We look forward to making it easier for you to complete all your financial spring cleaning tasks.   

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