Senior VP and Senior Consultant Joe Chickey, draws on interactions with his own parents, who are in their 90s, turning these experiences into teachable planned giving moments. Here, he explores lessons in appreciated stock.
After much heartfelt discussion and thoughtful debate, my parents recently decided it was time to leave their home of 32 years and move into a retirement community. While this was a difficult transition in many ways, they have quickly found many new friends and have adjusted well to their new environment.
During the moving process, we discovered that my father had an old stock certificate for a local bank that had not been converted to an electronic form. This stock was purchased 15 years ago and has appreciated in value quite significantly. This led to a conversation regarding their overall estate plan, specifically which assets were best to leave to family and other loved ones and which were best for charity.
We often discuss with our donors the opportunity to gift appreciated stock during their lifetime because they will avoid capital gains tax and can deduct the full value of the stock on their income taxes if they itemize. For donors considering an immediate gift of cash, giving appreciated securities can be a much better option.
From an estate planning perspective, donors may not always view highly appreciated securities as a good option to leave to their heirs, but they can be. Appreciated property receives a “step-up in basis” at death, thus avoiding capital gains for heirs. The stock’s inherited value would be equal to the market value on the day of death.
This interaction reiterated the importance of taking a “donor-centric” approach to gift planning. Sharing our knowledge with our donors allows them to make the best decisions for their family and their charitable interests.
Joe Chickey, MBA, CFP, is a senior vice president and senior consultant. You can connect with Joe via LinkedIn or at joe.chickey@sharpegroup.org.
Learn from Joe at the Sharpe Virtual Academy: Planned Giving #201—Skills To Acquire Major and Planned Gifts on April 17-18, 2024 or in person at the Advanced Gift Planning seminar in Chicago, May 14-15, 2024.
Share more information with your donors about giving appreciated securities.
