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Featured Advisor

Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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High Net Worth Wealth Management: Giving it Away

High net worth wealth management offers solutions to a persistent concern of affluent investors, using their money to help others.

| BY Adriana Reyneri

Charitable giving may sound like a rewarding activity, but it can be one of the more challenging aspects of high net worth wealth management, according to Millionaire Corner research.

Two-in-five high net worth investors identify “using my money to help others” as a personal financial concern, according to a Millionaire Corner study conducted in the first quarter of 2012. Our research indicates charitable giving is a more worrisome aspect of high net worth wealth management than planning for retirement, paying for college or affording monthly mortgage payments. High net worth investors even rank their philanthropic activities as a higher level concern than job security. (Key investment strategies of high net worth investors are focused around risk, diversity and tax consequences, and often involve a charitable component.)

Giving money away is no simple matter for affluent investors who seek to align their charitable goals with an overall high net worth wealth management plan, according to Wells Fargo Philanthropic Services.  Charitable giving can be structured in a variety of ways that give high net worth investors varying degrees of control over their “social capital.”

These structured lifetime giving strategies enable high net worth investors to transfer gifts to a trust, foundation or donor-advised fund.  A charitable remainder trust is one of the most common high net worth wealth management strategies for accomplishing philanthropic goals, according to Wells Fargo, because it provides an income stream, while allowing investors to contribute assets for charitable purposes.

A charitable lead trust may be a good high net worth wealth management strategy for philanthropically-minded investors who are concerned about the impact of estate and gift taxes on wealth passed on to their heirs, according to Wells Fargo.

A private foundation used to be a high net worth wealth management strategy reserved for only the wealthiest of families, according to Wells Fargo, but now appeals to a greater number of investors who want to maintain control over giving strategies and manage donated assets. (Many high net worth investors accomplish charitable goals through annuity products.)

A donor-advised fund can be another tax-efficient alternative to direct giving, according to Wells Fargo, and may be a suitable high net worth wealth management strategy for donors wishing some control over how gifts are distributed.