A Qualified Charitable Distribution (QCD) is a powerful tool that allows IRA owners to donate directly to qualified charities, bypassing the usual tax implications of IRA distributions.
Encouraging donors to give from their IRA is a creative way for a donor to give with impact and save on taxes. The impact is the same whether a donor gives from their bank account or their IRA. A QCD gift is a win-win!
AI is becoming increasingly popular in the nonprofit sector. Learn how your organization can get started and use AI to improve its fundraising strategy.
If we truly want to promote financial products to everyone, it’s time to remove the name estate from the term “estate planning.”
For many of us in the financial services industry, removing the fallback term “estate planning” may come as a shock. But the word immediately suggests wealth beyond the ordinary. Even dictionary.com’s first definition of the word “estate” says “an extensive area of land in the country, usually with a large house, owned by one person, family, or organization.” The Cambridge Dictionary’s second definition, “everything that a person owns when he or she dies” is more accurate, and it’s the definition that we should focus on as financial professionals. Yes, WE know that estate planning is good for anyone who has assets, but the name scares away potential clients who are in the market for wills, insurance, investments, and other financial products. Perhaps “money’’ and “legacy” are more inclusive and accessible words to use to position the concept of asset management for everybody.
Why is it important to democratize money planning? The statistics on the general population show us:
Considering these facts, how can financial institutions support mass market households who need tools, products, and guidance to meet their financial goals and plan for their legacy? A good place to begin is to focus on the basics:
Sudipto Banerjee, Vice President, Retirement Thought Leadership at T. Rowe Price, offers one possible solution to address financial wellness for the masses. “The retirement industry can act now to help close the [retirement savings] gap by encouraging employers to not only sponsor plans but to incorporate plan design levers, such as auto-enrollment and auto-escalation, and by offering financial wellness programs.”
The financial wellness programs that Mr. Banerjee mentioned should include a tool like an online last will & testament. To broaden the use of a will and associated end-of-life planning tools, they can be offered for free on employer platforms, online consumer learning portals and via financial advisors and agents as relationship building tools.
Offering a will as a complementary legacy planning tool is an opportunity to democratize the way we offer our products to most Americans. Making the will broadly available to people through their employers, on the “learning” portion of your website, through your agent distribution channels or using social media to promote its availability helps to drive wide usage. Embedding questions and product offerings in the online will can drive direct to consumer and agent-assisted sales of products in a low-key, low-pressure environment. The will can also be a tool for social good with a section dedicated to planned giving. Imagine adding questions at the end of the will such as:
Based on the answers to these questions, a company can engage with the client in many ways, including providing virtual financial advice, call center interactions or in-person consultation where warranted.
By providing a complementary last will & testament, the financial institution wins with additional sales and enjoys the side benefit of making money planning available to the masses while also promoting social good. The mass market client wins because they will be presented with products that can potentially meet protection, asset accumulation, distribution, and charitable giving needs. The industry has often talked a good game regarding addressing the financial needs of the mass market. Offering a last will & testament to everyday Americans is a great way to deliver on this promise.
Get started with your legacy or learn more about our solutions for nonprofits below.
A Qualified Charitable Distribution (QCD) is a powerful tool that allows IRA owners to donate directly to qualified charities, bypassing the usual tax implications of IRA distributions.
Encouraging donors to give from their IRA is a creative way for a donor to give with impact and save on taxes. The impact is the same whether a donor gives from their bank account or their IRA. A QCD gift is a win-win!
AI is becoming increasingly popular in the nonprofit sector. Learn how your organization can get started and use AI to improve its fundraising strategy.
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