For private business owners, giving stock can be a powerful strategy to achieve both charitable and business succession goals. Katie Vogel, Director of Donor Services at the Omaha Community Foundation, emphasized the significance of this approach, especially in the context of recent legal and tax developments.
“Not only could these gifts help implement a business succession plan that calls for transferring the business to the next generation if that was your client’s goal, but gifts of stock could also help your client achieve charitable goals and benefit them when it comes to estate tax,” Vogel said.
With the estate tax exemption sunset looming at the end of next year, this strategy has been gaining attention. “More financial and estate planning advisors are encouraging their clients to explore making gifts of closely-held stock,” Vogel said. “Without intervening legislation, many more clients would need to rethink both the timing and methods to transfer business interests as they wrestle with the reality of a potentially hefty tax burden.”
Valuation of closely-held business interests was another crucial aspect, especially in light of the Supreme Court ruling in Connelly v. United States. “The Connelly decision affected the way business interests were valued for estate tax purposes,” Vogel said. “This could result in higher taxable estates for business owner clients, making charitable gifts of stock an even more appealing option.”
Vogel also urged business owners and their advisors to work closely with the Omaha Community Foundation in light of these legal and tax changes. “Careful planning could help avoid potential pitfalls,” she advised. The OCF Donor Services team is equipped to help business owners navigate these developments while aligning their charitable goals with long-term strategies that offer tax advantages.
For private business owners considering charitable giving as part of their succession and estate planning, Vogel recommends exploring stock donations. The Omaha Community Foundation provides expert guidance to help align business owners’ philanthropic goals with strategies that maximize both impact and tax benefits.
For more information, reach out to the Omaha Community Foundation to see how we can assist you with these important decisions.