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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

May/June 2022

Giving to Charity with a Donor-Advised Fund

Giving to Charity with a Donor-Advised Fund

A donor-advised fund (DAF) is a charitable investment account established to manage charitable contributions from many different donors. When you contribute to a DAF, you generally can choose the charities you want to support and the time frame for distributing the assets. You’re entitled to an immediate tax deduction for the full amount of your contribution in the year you donate the assets, even if the charity won’t receive them right away. You don’t have to be wealthy to contribute to a DAF. Some funds have relatively low contribution thresholds.

Making Contributions
You can contribute many kinds of assets to a DAF, including cash; stocks, bonds, and mutual funds; retirement account assets; cryptocurrency; life insurance; and other assets. You won’t pay capital gains on any appreciated assets you donate to the fund, and you’ll typically be entitled to a tax deduction based on the asset’s current value. Wealthy donors may be able to reduce the size of their estate for estate tax purposes by contributing to a DAF, because assets contributed to the fund aren’t subject to estate tax.


Getting Started
There are several types of sponsoring organizations for DAF: community and faith-based organizations; public foundations, including national and international charities and university and hospital foundations; and national DAF organizations. Your first step should be to identify the type of fund that aligns with your giving strategy.


Although you can specify the organizations that you want to support, keep in mind that the fund makes the final decision on where your donations ultimately go.


A Word About Life Insurance
Gifting a life insurance policy that you no longer need to a DAF is one option to consider. The fund administrator then becomes the sole owner and beneficiary of the policy. A qualified appraiser will determine an accurate value for the deduction.


When Will it End?
You can make a bequest in your will to the DAF sponsor or make the sponsor a beneficiary of assets. Many sponsoring organizations also enable you to create a succession plan for your DAF—allowing you to pass the remaining funds in your account on to your heirs or to your favorite charities.


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Investment advisory services are offered through Fusion Capital Management, an SEC Registered Investment Advisor. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration is not an endorsement of the firm by the commission and does not mean that the advisor has attained a specific level of skill or ability. All investment strategies have the potential for profit or loss.
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