In a recent letter to Berkshire Hathaway shareholders, Warren Buffett made waves. The 94-year-old Oracle of Omaha used this correspondence to outline his ongoing philanthropic goals for his enormous fortune, which is currently estimated at about $150 billion, rather than to promote his multi-decade investing accomplishments.Relevant ArticlesHoliday shopping should indicate a soft landing, according to Business | Jill On Money.Business | Opinion: By neglecting to preserve our data, Big Tech violated customer confidence.Business | Jill On Money: The response of the market to Trump 2.0Business | Following the election, the economy is still thriving.Get your complimentary weekly credit report as a business or consumer tip.
In an attempt to do good and avoid leaving a generational legacy, Buffett gave his family’s four foundations an additional $1.1 billion in Berkshire Hathaway stock. I’ve never wanted to start a family or follow any kind of plan that involved more than just the kids. I have great faith in the three, whom I know well. Future generations are a different story.
This was a startling statement, as I frequently hear from families about their wish to provide for their children, grandchildren, and great-grandchildren.
Buffett has always advocated for extremely affluent parents to leave their kids enough money to accomplish anything they want, but not enough to do nothing. That’s good advise for those who aren’t as affluent. We might not have to consider distributing enormous sums of money (which is a fantastic problem to have!), but instead of constructing for future generations, more people should focus on maintaining their own financial foundation.
For all parents, regardless of their level of income, there was also a fantastic gem on estate planning. Before you sign your will, have your children read it when they are old enough. Make certain that every child comprehends the reasoning behind your choices as well as the obligations they will face after your passing. Listen carefully to everyone who has questions or suggestions, and take those that seem reasonable.
Buffett typically gives gifts around Thanksgiving, which is also when you might be considering giving to charities. According to the IRS, here are some best practices to remember as the solicitations come in, regardless of whether you have billions of dollars or not.
To trick people, scammers adopt names that sound like well-known charity. Request the name, website, and postal address of the charity so that you can use the IRS Tax Exempt Organization Search tool to independently check the accuracy of the information. Steer clear of nonprofits that request gifts or wire transfers.
Advanced scammers are aware of the value of your personal data. Passwords, credit card numbers, Social Security numbers, and other personal information should never be shared unless you are certain that the company is legitimate.
Legitimate charity welcome donations at any time, but scammers frequently demand cash right away. Leave if you receive a hard sell.
The tax benefit for charitable giving is only available to the 12 percent or so of people who itemize their deductions. In order to surpass the standard deduction level and expedite your philanthropic contributions for that year, you may attempt to group deductions. Maintain accurate records if you plan to claim a charity deduction.
Significant stock market gains can support your humanitarian endeavors for many years to come. Most large investment firms allow you to form a DAF, add appreciated assets to the fund, and then give to any charity over the following few years.
One further awesome benefit of DAFs is that you can avoid paying taxes on the cumulative gains by writing off the current market value, not just what you paid. You may transfer your whole stake into a DAF, receive a charitable deduction for the full $25,000, and avoid paying capital gains tax on the $20,000 in gains if you invested $5,000 in Nvidia and it has now increased in value to $25,000.
Business analyst Jill Schlesinger, CFP, works for CBS News. Her email address is [email protected]. She is a former options trader and the CIO of an investment advising firm. Visit www.jillonmoney.com, her website.
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