“Insider giving” and seats at the table: A team approach is essential to crafting an effective philanthropy plan

As corporate valuations soar, you may be getting more frequent questions from executives at publicly-traded companies about the tax benefits of transactions involving highly-appreciated stock. Proper planning is critical to optimize the tax aspects of a transaction, but no advisor should go it alone. A client’s attorney, accountant, and financial advisor should be at the table together to ensure that all parties are coordinated and unintended negative consequences are avoided.

For transactions involving charitable giving, consider inviting a knowledgeable professional from YouthBridge Community Foundation to participate in the planning. Not only can YouthBridge offer structures to streamline administration, create tax efficiencies, and maximize your client’s charitable wishes, we can also serve as a source of up-to-the-minute developments in charitable tax planning policy and regulation.

An excellent example of this will be discussed in an upcoming issue of the Duke Law Journal on the topic of “insider giving.” A study conducted by University of Michigan professors found that charitable gifts of stock by shareholders who own 10% or more of a company’s shares tend to be “suspiciously well-timed.” Thus, charitable transactions involving securities may very well begin to receive more scrutiny from the SEC.

Our team is watching this and other developments closely to help you help your clients succeed. With YouthBridge at the table during estate planning meetings involving philanthropic strategies, emerging pitfalls such as “insider giving” are more likely to be avoided.

This article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. If you have any questions or would like to discuss your giving strategy, please contact Cindy Blake.