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Considering Philanthropy Throughout Divorce

Going through a divorce causes some individuals to review and assess their current and future philanthropy throughout divorce. The separating couple may have to evaluate important decisions prior to the divorce being finalized.

 

For the individuals who utilize the services of legal and financial professionals throughout the divorce process, these professionals can be very beneficial for you. These professionals can help review the philanthropic plans that each couple would like to achieve currently and after their divorce is final.

 

 

Planning for the future and after a divorce is very important for an individual to do when they are going through a divorce. This will ensure that a person has what they need to succeed and prosper moving forward. In many instances, a couple has certain charities that they give to. This will change throughout the divorce process. Each individual will be responsible for picking their own charities. Couples going through a divorce should think about what non-profit agencies they would like to support and begin developing their own philanthropic identities. Often, these new plans will need the individual to think about tax planning and review of any appreciated/low-basis securities.

 

There are key considerations that can help an individual during this period of changes in their life. The basic giving plan considerations are as follows:

 

  1. Review the Client’s Giving Plan and Giving Budget.

    Financial advisors are able to run projections to help clients relating to a client’s future budget and other financial needs. This includes any philanthropic plans that the individual may have.

 

  1. Reach out to the Charities.

    Any client or individual who is going through a divorce or separation should reach out to the charities that they support and provide updated contact information for themselves. This includes phone numbers and new address.

 

  1. Update Recurring Giving Programs.

    Ensure to double check and update any recurring programs you give to where a credit card is attached.

 

  1. Discuss any Pledges.

This is the time a person should review and assess the charities which they support. They can make any changes they see fit.

 

When a couple is more involved in their philanthropy and has a more formal plan there are other considerations that should be taken into consideration. They are as follows:

 

  1. Donor Advised Fund Plans: These types of plans allow for the client to set up a personalized charitable account to help transfer funds smoothly for their annual charitable giving. Using a Donor Advised Fund will usually qualify for charity income tax deduction immediately. It will grow tax free until such a time the donor gives to the charities they have decided to support and give to. This will also allow the donor to set the periods at which the grants are given. One way to divvy up the funds for divorcing spouses is to have each spouse decide on their own Donor Advised Fund giving plans.

 

  1. Family Foundations: In some family dynamics, the families have set up family foundations. Family foundations are often more complex than other structures. The family foundation is often founded by a family to be more formal. A family foundation also provides the family with more flexibility and control than other structures do. In a family foundation, more family members are usually involved. This is what makes this structure more complex than the others, especially in a transitional period such as divorce. If a couple is not able to continue working together, their attorneys will have to look into different options. These options can include one spouse receiving the family foundation, splitting the foundation into two, or terminating the foundation completely. Any couple with a family foundation will need to make the decision that is best for them and their situation.

 

  1. Planned Giving Commitments: Reviewing any planned giving commitments is vital. Clients may need to review their estate planning documents to ensure that their charitable bequests match what they want to achieve in the future. Even if the bequests are what the client wants to achieve in the future, a client may still be obligated to contact the charity and provide them an update on their marital status especially if the spouses no longer wish to be recognized as a couple for these charities.

 

Divorce is a hard and emotionally draining time in anyone’s life. Ensuring that all philanthropic wishes and plans are taken into consideration is important. Having the guidance of experienced and knowledgeable financial advisors can help lead a client through these tough decisions as well as help them plan for their future philanthropy.

 

For more information, please see article “November’s Tip: Help Clients Develop a New Philanthropic Identity After Divorce” by Walter J. Dillingham, Jr., on familylawyermagazine.com.

 

The attorneys at Kathryn Wayne-Spindler & Associates are experienced attorneys who change with the times to meet the needs of their clients. Contact the Milford, Michigan law office of Kathryn Wayne-Spindler & Associates at 248-676-1000 for assistance.  Or contact our new location in Alexander City, Alabama at 800-809-9414. The attorneys of Kathryn Wayne-Spindler & Associates practice law throughout Southeastern Michigan primarily including Oakland, Wayne, Washtenaw, Genesee and Livingston counties. In Alabama Kathryn practices in primarily Tallapoosa, Lee, Macon, Chambers, Coosa and Elmore Counties.