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A Beneficiary Often Overlooked

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At Falcon Wealth Advisors, we are constantly evaluating ways to improve our clients’ financial plans. There are endless strategies to consider and each client has a unique plan. Sometimes, clients can find themselves with a high concentration of appreciated company stock in their portfolio. In order to help manage risk, we may look at diversifying away some of this position. One solution we implement for this is referred to as a charitable remainder trust. My recent blog discusses how this tool works.

A charitable remainder trust comes in conjunction with plenty of decisions to make. How long would you like it to last? How would you like the payment structure to work? One of the most important decisions is what charitable cause you would like to elect as the beneficiary of the funds after the trust lifespan matures. A donor advised fund is a solution often overlooked.

If you don’t already have a donor advised fund, this is something we can help you establish. If you do, you can select the fund to be your beneficiary for your charitable remainder trust. The trust will continue to operate through its designated life span and make payments to the beneficiary. Then, at the end of the lifespan of the trust, the remaining funds will be donated to your donor advised fund.

This can beneficial for multiple reasons. When you create your donor advised fund, you have the option to appoint a successor advisor on the account. Some people will select their children or other heirs to fulfill this role. When the funds from your charitable remainder trust are donated to your donor advised fund, the successor advisor now oversees the donations. This gives the successor advisor a sense of responsibility. They can select which causes the funds in your donor advised fund will benefit. This responsibility can lead to plenty of positive by-products. Studies have shown that charitable donations can lead to a happier life and a positive outlook on life. Not only are you benefiting the successor advisor in this regard, but you also are benefitting your legacy. The funds will be given in the name of your donor advised fund. These charitable causes will benefit tremendously from the donations made in your name.

A donor advised fund can be overlooked as an option for a charitable remainder trust beneficiary. This is yet another tedious detail in the financial planning world. We take deep pride in examining every detail of our clients’ financial plans and acting as fiduciaries on their behalf. If you have questions about this blog, or how we can help improve your financial plan, a great place to start is by emailing me at matt@falconwealthadvisors.com. Thanks for reading!

Matt Johnson

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Falcon Wealth Advisors is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

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This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.