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Retirement assets are becoming an increasingly important part of charitable planning. Americans hold more than $50 trillion in retirement accounts—nearly $20 trillion of which are held in IRAs. Meanwhile, the Great Wealth Transfer is underway, with more than $120 trillion expected to change hands over the coming decades.
In light of these trends, it is especially important for estate planning attorneys, CPAs, and financial advisors to remind clients that IRAs in particular offer two distinct charitable planning opportunities. Why? Because:
–Clients may blur the two opportunities together
–Clients may know about one opportunity but not the other
–Clients may simply not realize that IRAs and other retirement assets can play a role in their charitable plans at all
So what are these opportunities, in plain language that you can use with your clients? Here’s a primer:
Lifetime giving opportunities for clients age 70½ and older
You’re likely well aware that a client age 70½ or older may make a Qualified Charitable Distribution (QCD) directly from an IRA to a qualified charity, including some types of funds at the San Angelo Area Foundation (but not a donor-advised fund, although pending legislation could change that). In 2026, the inflation-adjusted QCD limit is $111,000 per taxpayer.
QCDs can become particularly relevant for a client when required minimum distributions begin, currently at age 73. A QCD can count toward a client's RMD while still excluding the distributed amount from taxable income, assuming applicable requirements are met. But there is no need to wait until RMD age to begin the conversation. The QCD opportunity begins at 70½.
Under current law (note that legislation is pending that could change it), QCDs generally must come from IRAs; distributions directly from employer-sponsored retirement plans such as 401(k)s and 403(b)s do not qualify.
Legacy giving opportunity for clients of all ages
You know quite well that a client can name a charity (including a donor-advised fund at the San Angelo Area Foundation) as the beneficiary of an IRA or other type of eligible retirement plan, allowing some or all of the assets remaining in the account at death to pass to charity. The designation itself is relatively simple, and it can be incorporated into a client's overall estate and charitable planning without necessarily changing the client's current lifetime giving.
This technique is especially useful because retirement plan assets passing to a charitable beneficiary typically are not subject to the income tax that generally applies when heirs receive taxable distributions from inherited traditional IRAs and retirement plans.
So what’s the issue?
Clients sometimes do not realize that these opportunities are independent of one another. One client might use QCDs to support favorite charities throughout retirement and also name a charity as the beneficiary of some or all of a retirement account. Another client may have little interest in lifetime IRA giving but find the beneficiary designation compelling as part of a legacy plan.
That's why this should not be a one-and-done conversation. Retirement balances change. Charitable interests evolve. Clients reach new ages and life stages. Estate plans get updated. And a client who wasn't ready to consider one of these strategies the last time you discussed charitable giving may be ready now.
As retirement assets continue to grow and the Great Wealth Transfer accelerates, consider making two questions a regular part of conversations with charitably inclined clients:
–If you’re 70½ or older, could your IRA help support the causes you care about during your lifetime?
–Could your retirement assets play a role in the legacy you ultimately leave behind?
Keep your eyes on pending legislation that might expand the ways your clients can use QCDs. Congress is considering two bipartisan charitable giving proposals: the Charity Parity Act, which would permit QCDs directly from employer-sponsored retirement plans, such as 401(k)s, in addition to traditional IRAs, and the IRA Charitable Rollover Facilitation and Enhancement Act, which would extend QCD eligibility to donor-advised funds. Neither proposal has advanced beyond committee, but both remain pending and of course could be very useful to expand charitable giving options if enacted.
As always, please reach out to the San Angelo Area Foundation anytime you encounter the topic of QCDs, retirement plan legacy gifts to charity, or any other issue involving charitable giving. We are here for you!
It’s November! You are well aware of the calendar, of course, and so are your clients. You’ve also likely already begun reminding clients about year-end tax deadlines and important loose ends to tie up before 2027 hits. Remember, though, that memories are short, and just because you’ve already mentioned year-end deadlines doesn’t mean you should stop reminding your clients. Clients appreciate knowing that you are on top of their estate planning, tax planning, and financial planning priorities.
When it comes to charitable giving reminders, the San Angelo Area Foundation is here to help! Reminders are especially important this year because new charitable deduction rules took effect in 2026 and markets may have created opportunities for clients to give appreciated assets—not to mention the usual changes in families, businesses, and finances that are inevitable every year.
Here is a checklist of five important items to include in your client conversations as you help clients prepare for December 31 deadlines.
Client 70½ or older? Ask about QCDs. Always.
We’ve said it before and we’ll say it again! For clients age 70½ and older, a Qualified Charitable Distribution from an IRA can be an excellent way to support favorite charities. For 2026, the QCD limit is $111,000 per taxpayer. For clients who are also subject to required minimum distributions, a QCD can count toward the RMD while generally excluding the qualifying distributed amount from taxable income. Remember, under current law, QCDs cannot be made to donor-advised funds, although other types of funds at the San Angelo Area Foundation may qualify.
Much ado about bunching.
As you work with clients who regularly support favorite charities, it’s crucial to revisit a technique called “bunching.” The higher standard deduction means many clients will not itemize every year, and the new 0.5%-of-AGI floor on itemized charitable contribution deductions adds another consideration in 2026. A client who normally gives similar amounts each year might benefit from concentrating several years of charitable contributions into a single tax year and taking the standard deduction in intervening years. A donor-advised fund at the San Angelo Area Foundation can be especially useful here because the client can make the larger contribution now and recommend grants to favorite charities over time.
Cash is not king!
Before a client writes a check to their fund at the San Angelo Area Foundation or to other charities, encourage them to stop and think and check with you first! Advisors are often looking for highly appreciated stock within clients’ portfolios. Publicly traded securities held for more than one year are often particularly attractive assets to give to charity because donating the shares directly can generally allow the client to avoid recognizing the unrealized capital gains while qualifying for a charitable deduction based on fair market value, subject to applicable limitations. The San Angelo Area Foundation can accept the stock and sell it so that the proceeds can be put to use in the client’s donor-advised or other type of fund.
What’s more, stock isn't the only asset worth considering. Depending on a client's circumstances, closely held business interests, real estate, and other appreciated property may offer charitable planning opportunities. These gifts require more advance planning than writing a check—and that's precisely why it is a good time to start the conversation. The San Angelo Area Foundation can help determine whether a proposed asset is appropriate to accept and work alongside you and the client’s other advisors.
Non-itemizers, raise your hands!
Don't overlook the new deduction for your clients who do not itemize their deductions. Beginning with the 2026 tax year, a client who takes the standard deduction can still deduct up to $1,000 in qualifying cash charitable contributions, or $2,000 for married couples filing jointly, subject to limitations (e.g., only cash gifts count, and gifts to donor-advised funds are excluded). For clients who assumed there was “no tax benefit” to their charitable gifts because they don't itemize, this is worth mentioning!
Think long-term.
Certainly, during the last quarter of every year your focus is likely on helping clients meet the December 31 deadline for various tax planning and charitable giving strategies. But don’t stop there! This is also a great time to do a quick check-in on your clients’ long-term charitable plans. Has the client already provided for a charity such as the San Angelo Area Foundation, or a fund at the San Angelo Area Foundation, in a will or trust? Have IRA beneficiary designations been reviewed recently to determine whether a charitable gift makes sense as part of the account’s ultimate disposition? Your clients are in a “get it done” mode anyway, so now is a good opportunity to make sure their charitable intentions are accurately reflected in an estate plan.
As you address year-end planning priorities with your clients, please reach out to the San Angelo Area Foundation. We are honored to serve as your clients’ home for charitable giving—and grateful to be your first call when matters of philanthropy arise in your work. Thank you!
If you advise charitable clients in your practice, you are no stranger to the IRS’s requirements for substantiating charitable deductions.
In some cases, however, tax advisors and their clients are so focused on valuing the gift and filing the Form 8283 that they overlook the requirement for a “contemporaneous written acknowledgment.” And this can derail the deduction! It sure was for the taxpayers in Wells v. Commissioner, T.C. Memo. 2026-49, involving a claimed charitable deduction carryover stemming from a gift of Mississippi real estate to a nonprofit organization.
The property had been appraised at $4.42 million. And there was plenty of documentation surrounding the gift. The taxpayers had an appraisal. The property was transferred by deed. The charity's president sent a letter thanking the donors and referencing the property's appraised value. The taxpayers also filed a Form 8283.
So what went wrong?
The charity's acknowledgment letter did not state whether the organization had provided any goods or services in exchange for the contribution. You know the rule:
A donor claiming a deduction of $250 or more is also required to obtain and keep a contemporaneous written acknowledgment for a charitable contribution. To be contemporaneous, the written acknowledgment must generally be obtained by the donor no later than the date the donor files the return for the year the contribution is made. The written acknowledgment must state whether the donee provides any goods or services in consideration for the contribution.
Specifically, Internal Revenue Code Section 170(f)(8)(C) requires the donor to obtain the acknowledgment by the earlier of (1) the date the donor actually files the tax return for the year of the gift or (2) the return's due date, including extensions.
In the Wells case, the contemporaneous written acknowledgment was missing a critical required statement. Although the taxpayers argued that their various documents, considered together, were enough to substantiate the contribution, the Tax Court disagreed. The statutory acknowledgment requirement had not been satisfied, and the charitable deduction carryovers were disallowed.
For advisors, Wells is a valuable reminder that the mechanics of charitable giving deserve just as much attention as the strategy. This is especially important when clients are giving real estate, closely held business interests, or other noncash assets where the deductions can be substantial and additional substantiation requirements may apply.
When you're helping a client make a significant charitable gift, don't assume that a deed, appraisal, Form 8283, or friendly thank-you letter necessarily checks every box. Make sure the client is paying close attention to the specific documentation requirements—and involve the charitable organization early enough to correct any problems before the applicable deadline.
The defect in Wells was fixable, but only if someone had caught it in time. Again, Internal Revenue Code Section 170(f)(8)(C) says that the donor must obtain a compliant acknowledgment by the earlier of (1) the date the donor actually files the tax return for the year of the gift or (2) the return's due date, including extensions.
So imagine that Wells's tax advisors had reviewed the charitable-gift file while preparing the 2016 return and noticed that the nonprofit's letter didn't say whether goods or services had been provided in exchange for the property. The solution to this particular problem may have been straightforward: contact the nonprofit and obtain a corrected or supplemental written acknowledgment containing the missing statement before filing the return.
As always, the San Angelo Area Foundation is happy to let you know about tax rulings and updates that offer insight into charitable planning techniques. We are also happy to serve as a sounding board as you work with clients on charitable giving strategies, including gifts of complex assets into a client’s donor-advised or other type of fund. We look forward to our next conversation!
Every day, the San Angelo Area Foundation works with attorneys, CPAs, and financial advisors to help clients support the charities and causes they care about. Often, those conversations involve gifts of appreciated noncash assets—and this is great because of the potential tax benefits. Appreciated stock may be the first noncash asset that comes to mind, but a client’s portfolio can include many other types of investments that deserve a closer look when charitable giving is part of the plan.
Government securities are a good example. Although clients may think of these investments as a single asset category, “government securities” actually encompasses a surprisingly broad range of holdings, including Treasury bills (T-bills), Treasury notes, Treasury bonds, Treasury Inflation-Protected Securities (TIPS), Series EE and Series I savings bonds, and securities issued by federal agencies and government-sponsored enterprises.
Why does that matter for charitable planning? It matters because not all government securities are created equal where charitable giving is concerned. Here are a few points to keep in mind:
—Government securities can differ significantly in how they generate income, whether they are marketable or transferable, how they are valued, and how their interest or appreciation is taxed. As a result, a charitable strategy that works for one type of government security may not work for another. And even when a government security can be transferred directly to charity, the tax results may be quite different from those associated with the more familiar gift of appreciated stock.
—This dynamic is especially striking when comparing marketable Treasury securities, which may be transferable to charity, with savings bonds, which present very different transfer and income tax issues and may be more interesting in estate planning than as lifetime charitable gifts.
—Marketable Treasury securities may be used for charitable giving, but advisors will want to look carefully at the particular security before recommending a strategy. Transfer and charitable acceptance considerations come into play, as do valuation and tax considerations. The security’s holding period, basis, fair market value, and the character of its return can all be relevant because Treasury securities may generate interest or original issue discount rather than the long-term capital appreciation that makes gifts of highly appreciated stock such a familiar charitable planning technique.
—Savings bonds present an even more distinctive situation. Unlike appreciated stock, savings bonds generally are not well suited to a straightforward lifetime charitable gift because transferring the bonds may trigger recognition of previously deferred interest.. Series EE and Series I savings bonds accumulate interest that is subject to federal income tax, and many owners defer reporting that interest until the bonds are redeemed or mature. If a client simply cashes in savings bonds during life and then contributes the proceeds to charity, the client generally recognizes the accumulated interest. In other words, the strategy does not offer the same tax advantage that may be available when a client contributes appreciated publicly traded stock directly to charity.
—This does not mean savings bonds should be ignored in charitable planning. Quite the opposite: They may be especially interesting in the overall context of a client’s estate plan. This is because accumulated interest on savings bonds can constitute income in respect of a decedent, or IRD. That means leaving savings bonds to individual beneficiaries can carry an income tax consequence in addition to transferring the underlying asset. That IRD characteristic can make savings bonds worth considering in charitable estate planning because a qualified charitable organization generally is not subject to federal income tax on income it receives in furtherance of its exempt purposes. For a client who has held savings bonds for many years, this creates a good reason to identify those assets during the estate planning process and consider whether they may be better suited for charitable purposes than other assets the client intends to leave to family members.
The larger lesson is one advisors encounter frequently in charitable planning: The asset matters! Two investments that look similar on a client’s balance sheet can produce very different tax and charitable planning results.
For all of these reasons and more, the San Angelo Area Foundation team welcomes a call early in the process. If your client owns Treasury securities, savings bonds, or other noncash assets and has charitable intentions, please reach out before the client takes action. We are happy to work alongside you to explore whether the asset can be accepted, how a potential gift might be structured, and how the San Angelo Area Foundation can help your client achieve charitable goals while you and the client’s other advisors address the legal, tax, and financial considerations.
The San Angelo Area Foundation team is happy to keep an eye out for what’s trending in the field of charitable planning, especially developments that impact your work with your charitable clients and how those clients tap into tools and resources at the San Angelo Area Foundation. Check out these six articles that have caught our attention recently.
Philanthropy beyond DAFs
Philanthropic Planning Is Wealth Management's Next Competitive Frontier, Beyond DAFs
–InvestmentNews
Donor-advised funds are important tools, but they are not the whole philanthropic toolbox. This article explores why high-net-worth clients increasingly expect wealth advisors to help them consider a broader range of charitable structures and how that expertise can help advisors strengthen relationships not only with clients, but also with the next generation. Remember, the San Angelo Area Foundation offers a wide range of fund types and charitable planning structures to help your clients establish a lifetime and legacy giving plan tailored to their financial and charitable goals.
Donor-advised fund insights
Five Core Truths About Donor-Advised Funds
–WealthManagement.com
This article takes on some common misconceptions about donor-advised funds, highlighting their usefulness for coordinating charitable giving and facilitating complex gifts, their significant grantmaking to charities, and their increasingly important role in charitable and succession planning. For advisors, the takeaway is that donor-advised funds have become an increasingly important part of the philanthropic landscape—and understanding how they actually work can help clients make better charitable planning decisions. And of course, the San Angelo Area Foundation offers donor-advised funds as part of its broad menu of charitable giving vehicles.
Big givers
Chickens, Pigs Could Be Big Winners From AI’s $300 Billion Philanthropy Wave
–Forbes
The AI boom is creating a new class of young, newly wealthy donors—and potentially an enormous new pool of charitable capital. This fascinating article explores how some of these donors are gravitating toward measurable, evidence-driven causes such as farm-animal welfare, illustrating both how sudden wealth can reshape philanthropy and why advisors working with newly wealthy clients have an opportunity to help turn rapidly created fortunes into intentional charitable plans. The San Angelo Area Foundation’s deep knowledge of local needs and nonprofits is an invaluable resource to you and your clients whether they are younger, older, newly wealthy, or well-established.
Celebrating a life of giving
Dolly Parton’s Other Legacy: A Fortune Given Away, Dollar by Dollar
–New York Times
Dolly Parton’s philanthropy was unusually practical and personal, directing her wealth toward needs she understood firsthand—from childhood literacy and disaster relief in Tennessee to wildlife conservation and COVID-19 vaccine research. Her approach emphasized simple, direct action, and trust in recipients—all of which are inspirational and aspirational to our San Angelo Area Foundation team and the advisors and donors we work with!
Exits and opportunities
How Advanced Charitable Exit Planning Drives AUM Growth
–Financial Advisor Magazine
Business exits can be important charitable planning moments, particularly when advisors raise the subject before a transaction is already underway. This article explores how strategies involving charitable trusts, donor-advised funds, and gifts of business interests can help address a business owner's tax and philanthropic objectives while also helping advisors deepen relationships and potentially retain more assets under management after the sale. As always, reach out to the San Angelo Area Foundation as early as possible!
The checkbook (cringe) lives on!
Retirees Over 70½ Can Send $111,000 a Year From an IRA to Charity Tax-Free. The Average One Donates From Checking Instead.
–24/7 Wall St.
Many charitably inclined retirees are still giving from their checking accounts even though a Qualified Charitable Distribution (QCD) may offer a more tax-efficient route for eligible IRA owners. The article is a useful reminder that advisors can add value simply by asking how a client is making charitable gifts: Sometimes changing the asset or account used to make the same gift can produce a very different tax result. As always, the San Angelo Area Foundation can help your clients explore eligible ways to make QCD gifts, including, where appropriate, gifts to designated, field-of-interest, and unrestricted funds. Remember that QCDs cannot be made to donor-advised funds.
What’s the takeaway here? As you skim these articles, or even just the headlines, a pattern emerges pretty quickly! Charitable planning opportunities are showing up everywhere—from newly minted tech wealth and business exits to retirement accounts, complex assets, and the rapidly evolving world of donor-advised funds. Just as important, the articles reinforce that good charitable planning is about more than finding a tax break or selecting a giving vehicle; it is about helping clients make thoughtful decisions about what to give, when to give it, and what they hope their generosity will accomplish.
The San Angelo Area Foundation team is here as a sounding board whenever those conversations arise. Please reach out anytime!