As people age, it is increasingly important to discuss their estates. While some people transfer money to heirs or charities, others’ estates end up being consumed by taxes. Broaching the subject can be difficult for all involved, especially for families and loved ones.

The responsibility to address charitable planning with older adults often falls to the financial advisor. It is best to have the conversation when they are ready, willing, and able to make decisions. The sooner this conversation begins, the easier the planning process will be.

Here are 10 practical tips for financial advisors to initiate conversations about charitable giving with seniors:

  1. Establish a Baseline for Charitable Planning
  2. Take the Initiative in Discussions
  3. Utilize Conversation Starters
  4. Explore Charitable Planning Options
  5. Start the Conversation About Legacy
  6. Address Privacy Preferences
  7. Leverage Tax Efficiencies
  8. Monitor and Adjust
  9. Educate and Empower
  10. Continue to Emphasize the Importance of Charitable Legacy

Tip #1: Establish a Baseline for Charitable Planning

Discuss charitable planning as soon as possible. By establishing a baseline plan early on, you can adapt and refine it over time to reflect changes in your client’s circumstances and priorities, working with them to ensure they make a meaningfully positive impact.

Tip #2: Take the Initiative in Discussions

It’s important to take the lead in conversations about charitable planning. Senior clients may not know all the options available, so you can use your expertise to present a range of choices that appeal to them. Knowing their philanthropic intent enables you to appropriately invest assets for charitable giving.

Tip #3: Utilize Conversation Starters

When you have a strong rapport with your client, open-ended questions about their philanthropic interests, values, and goals can lead to more serious planning. Then, you can ask follow-up questions to learn more, such as:

  • Do they have a timeframe for charitable giving?
  • Do they prefer to give during their lifetime, upon death, for a certain period after death, or a combination?
  • What percentage of their estate might they want to dedicate to charity?

Tip #4: Explore Charitable Planning Options

Since they might not be aware, educate senior clients about the various charitable planning options available, including:

Describe these options in detail but focus on aspects that align with your clients’ values – and discuss how you can tailor them to meet their financial and charitable goals.

Tip #5: Start the Conversation About Legacy

Legacy is important to everyone, but for seniors, it is often top of mind. Engaging older clients in discussions of legacy can lead directly into charitable planning. You can:

  • Discuss the client’s desire to involve their heirs in charitable giving.
  • Explore how their philanthropic decisions can impact future generations.
  • Highlight the impact their giving will have on the causes they care about most.

Tip #6: Address Privacy Preferences

Some may be apprehensive to donate due to privacy concerns. Respect clients’ privacy preferences for charitable giving and review their options. Explain that they have the choice to make anonymous donations through a donor-advised fund or receive public recognition for their generosity.

Tip #7: Leverage Tax Efficiencies

Showing clients how to maximize the tax benefits of their charitable contributions can ignite conversation. Ensure they understand the tax implications of their charitable giving decisions and the various strategies available to them.

Tip #8: Monitor and Adjust

Clients appreciate knowing an advisor is on top of things. Regularly review and adjust the charitable plan in response to changes in the client’s financial situation or philanthropic priorities. Stay proactive by monitoring the plan’s effectiveness and making necessary revisions.

Tip #9: Educate and Empower

You can empower clients by imparting knowledge about charitable planning options and their potential impact. Provide educational resources to help them make informed decisions about their philanthropy.

Tip #10: Continue to Emphasize the Importance of Charitable Legacy

As mentioned, it’s crucial to engage in meaningful conversations about legacy – continue that conversation with an emphasis on charitable planning. Highlight the significance of leaving a charitable legacy and the positive impact it has. Encourage them to reflect on their values and consider how their philanthropic contributions can make a lasting impact on the causes they care about most.

Financial advisors can show senior clients how to leave a lasting legacy, support important causes, and find fulfillment in their philanthropic endeavors. By starting the conversation right away – and continuing it – advisors can ensure their clients’ philanthropic goals are realized.

Continue the Charitable Planning Conversation with American Endowment Foundation

If you’re a financial advisor with a client who is interested in a donor-advised fund as part of their charitable planning, American Endowment Foundation (AEF) would love to talk. Contact AEF today so we can make a positive impact together.