Solutions for Your ClientsThe following scenarios suggest a handful of ways in which the Hartford Foundation works with advisors to develop a plan for a client.
We invite your suggestions of additional approaches.
An Unmarried Couple
The Situation: Your client wants to provide for a life partner, yet without the benefit of the federal marital deduction available to married people, their estate may be significantly reduced by gift and/or estate taxes.
The Solution: A charitable remainder trust (CRT) at the Hartford Foundation.
Benefit to the Client: A CRT can provide lifetime income to the donor and his or her partner, allowing for reduced capital gains, gift, and estate taxes, with the remainder at the second death creating a charitable fund for the community.
Benefit to the Community: Needed funds will be available to benefit local organizations and institutions.
Closely Held Company
The Situation: Your client's personal net worth is tied up in a closely held company, but he wants to find a way to support programs and activities in his community.
The Solution: Donate a portion of his company's stock to the Hartford Foundation to establish a Donor-Advised Fund. The company, or current stockholders, may buy back the stock over time, providing cash for the Donor-Advised Fund.
Benefit to Client: He earns an income tax deduction for the fair market value of the appreciated stock, while control of the company stays with known parties.
Benefit to Community: Organizations working in the areas he cares about receive grants through the Hartford Foundation.
Windfall
The Situation: Your client earns a whopping year-end bonus or commission, sells a business, receives an inheritance, or otherwise comes into a windfall. She likes the idea of making a long-term donation to organizations or institutions in her community, but she has no time to figure out which charities to share her good fortune with before the end of the tax year.
The Solution: A Donor-Advised fund with the Hartford Foundation.
Benefit to Client: She earns an immediate tax deduction, gains access to the Foundation's professional grantmaking staff for suggestions, and the option to stay involved for years to come with the projects that her Fund supports.
Benefit to Community: Projects and activities involved in work related to her interests receive needed grant funds from the Foundation.
More Than Enough
The Situation: Your client has more than enough assets to provide amply for her children, who are financially successful in their own right. She doesn't want to "spoil" her children or grandchildren.
The Solution: A fund at the Hartford Foundation in the name of the family for a purpose that is meaningful to the family. If the adult children are local, a family Donor-Advised Fund may bring them together to recommend grants.
Benefit to the Client: They know that their gift will sustain the family name forever, and has the potential to pass on philanthropic values to successive generations.
Benefit to the Community: Organizations in the community working in areas that relate to the donor’s intent receive grant funds from the Foundation.
Stuck In Estate Planning
The Situation: Your client has gotten "stuck" in estate planning, and you suspect that it's because thinking about the end of life is simply hard for her, as it is for many people.
The Solution: Give the client something rewarding to think about, like sustaining a valued institution or helping others.
Benefit to Client: Focusing on something future-oriented - like a legacy to the community - creates a sense of personal satisfaction that may be enough to create a sense of closure in the estate planning process, and give the donor something positive to talk about with friends and family.
Benefit to the Community: Long after her death, organizations or institutions in her community will receive needed grant dollars from the Foundation.
Setting An Example
The Situation: Your clients have worked hard all their lives, and are happy that they will be able to leave a sound financial legacy to their children. But they also want to leave a legacy to help educate the next generation - and they're a little concerned that their children don’t attach the same value that they do to philanthropy.
The Solution: A Scholarship Fund at the Hartford Foundation for which their children are designated as advisors.
Benefit to Client: They know their gift will change young lives by helping students pursue higher education. They also anticipate that the annual applicant review and selection process will change their own children's lives, by exposing them to both the needs of those less fortunate and the deep satisfaction of personal philanthropy.
Benefit to Community: Students from less advantaged backgrounds receive needed financial assistance to pursue postsecondary education.
Preserving Resources
The Situation: Your client has always been generous in her charitable giving, but she has grown more anxious as she's aged about ensuring that her resources last long enough to maintain her standard of living.
The Solution: A gift annuity or charitable remainder trust that generates lifetime income.
Benefit to Client: She earns an immediate tax deduction and the assurance of a predictable stream income (possibly even more than her assets are currently producing).
Benefit to Community: Her fund will continue to distribute grants after her death.
No Children To Inherit
The Situation: Your client does not have children and has more than enough in his estate to appropriately remember special loved ones.
The Solution: A fund at the Hartford Foundation will preserve your client's memory and allow for a charitable deduction, reducing estate taxes.
Benefit to the Client: Your client can create a lasting legacy in his or her community, saving taxes at the same time.
Benefit to the Community: Causes that your client cares about will benefit from grants through the Foundation.
Have an idea for another scenario?
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