• Maximizing Charitable Giving: Strategies for Making an Impact

    Tips to Help You Practice Meaningful and Strategic Philanthropy

    Many people find that being philanthropic with their money brings them joy. After all, being charitable can be a meaningful experience and is a way to put your core values into practice. Recent data confirms this, as the 2023 Giving USA Foundation report has shown that 64% of Americans donated to charity in the previous year. If being philanthropic fits with your personal and financial values, here are six strategies to help you maximize your charitable giving impact.

    Charitable Giving Impact Tip #1: Identify the Causes You Care About

    With finite resources, it’s important to be intentional about where to donate your money. Making a list of non-profit organizations that you have given to in the past, and perhaps adding some new organizations whose work you care about, is a good start. Looking over your list, consider what your current priorities in life are, and choose those that are in alignment with your values. This exercise can help you to ensure that your charitable dollars are supporting not just the causes that are appealing to you for help, but the causes that are currently important to you.

    Charitable Giving Impact Tip #2: Consider Streamlining Your Giving

    Speaking of those charitable appeals, it’s likely that you receive a multitude of donation requests from worthy nonprofits throughout the year. However, philanthropy isn’t like investing, where diversification is a recommended strategy. To maximize the impact of your philanthropy, you may consider streamlining your donations to charities that are akin and most closely align with your core values. For example, if animal welfare is important to you, you may want to focus your giving on shelters or animal and wildlife protection organizations. In this way, your giving achieves a greater impact across the spectrum of the cause you care most about.


    New Year, New Goals: Planning Your Money Moves for 2024


    Charitable Giving Impact Tip #3: Involve Your Family

    Philanthropy is about more than money. It can also involve sharing your values with future generations and teaching them about meaningful ways that they can make a difference in the lives of others. Gathering your family together to actively participate in charitable giving decisions can also create a new shared tradition. While together, you’re helping to instill the spirit of giving, while offering each family member the opportunity to share with everyone the causes that are most important to them. There are a variety of ways to maximize your family’s charitable giving, including pooling money together toward a selected cause, establishing a fund that allows family members to choose how to direct their donations, or annually rotating the selection of charitable causes. When you instill the habit of giving, you are also building a values-based tradition that will positively impact both your family members and the lives of others.

    Charitable Giving Impact Tip #4: Research the Charities Carefully

    Take the time to determine the best charities that will accomplish your family’s charitable goals. Knowing the mission of each organization is the best place to start. Be sure the mission and values of your chosen nonprofits align with your giving intentions. Also ensure that the finances and management of the organization are sound. Look into what percentage of charitable donations directly support the cause or programs, as opposed to administration and overhead. There are reputable tools to help you gain this knowledge such as Charity Navigator, GuideStar, Charity Watch, and Charities Review Council.

    Charitable Giving Impact Tip #5: Maximize Your Gift

    Having determined where you want to focus your philanthropy, there are some steps you can take to maximize your giving:

    • Give directly to avoid the middleman. Some nonprofits utilize the services of professional fundraisers, paying them anywhere from 40 to 80 percent of the proceeds received. Often these solicitations are via phone, so avoid this and give directly to the charitable organization.
    • Avoid using credit cards. Nonprofits usually have to pay a credit card fee of 3 to 5 percent, which reduces the amount of your donation and thus the level of your charitable giving impact.
    • Look into employer matching gift programs. Many employers offer the opportunity to match your gift, thus increasing your charitable contribution and your impact.
    • Gifting appreciated assets that you have held for more than one year as a direct gift can provide you with tax benefits while helping the charity of your choice. You may also consider establishing a donor-advised fund (DAF) which can also provide you with tax savings.

    Note: A donor-advised fund (DAF) is a charitable investment account that you establish at a public charitable foundation for the sole purpose of supporting nonprofit organizations that you care about. They provide a flexible way to donate with either cash or securities, and they can provide many tax advantages. A DAF can prove to be a strategically beneficial tool to consider in your philanthropic efforts, though it won’t be right for every family.

    Charitable Giving Impact Tip #6: Giving Beyond Money

    Donating money isn’t the only way to practice philanthropy. Time and talent can be just as valuable to a charitable organization, and many organizations need the skills of volunteers. Whether you’re giving at the financial level that you would like to or not, volunteering can help you feel more connected to the causes you care about.

    Concluding Thoughts on Maximizing Your Charitable Gifting Impact

    Practicing philanthropy through the giving of your time, talent, or money to make an impact on the charities and causes you care about can be very meaningful for both you and the organizations of your choice. Often, it doesn’t take a lot to make a difference. Be comfortable with the level of your giving and consider some of the strategies offered here to maximize your impact and instill the value of philanthropy in your family, as well.


    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • The Excise Tax Waiver Has Expired for 10-Year IRA Beneficiaries with Annual RMDs

    By: Denise Appleby, MJ, CISP, CRC, CRPS, CRSP, APA

    Beneficiaries subject to SECURE Act’s 10-year rule and required to take annual RMDs were granted an automatic waiver of the excise tax that would otherwise apply if they failed to take required minimum distributions (RMDs). These automatic waivers applied to 2021, 2022, and 2023. But, failing further extension by the IRS, these beneficiaries must take RMDs for 2024 to avoid the 25% excise tax.

    Who qualified for this automatic excise tax waiver?

    This automatic waiver applies only to beneficiaries who meet the following two requirements:

    1. They are subject to the 10-year rule, under which their inherited IRA must be fully distributed no later than the 10th year after they inherited the IRA. And
    2. They are required to take annual RMDs.

    These beneficiaries are:

    A. Any designated beneficiary who inherited a traditional, SEP, or SIMPLE IRA, where the IRA owner died on or after their required beginning date (RBD).

    • The RBD is the date an account owner must take their first RMD.
    • Roth IRAs are not included because Roth IRA owners do not have RMDs.

    Example 1

    50-year-old Tom inherited his 75-year-old father’s traditional IRA in 2020. Tom is more than ten years younger than his father, not disabled or chronically ill, and, therefore, not an eligible designated beneficiary. Since Tom is a plain designated beneficiary, he is subject to the 10-year rule and, therefore, must ensure that the inherited IRA is fully distributed by the end of 2030. In addition, because Tom’s father died after his RBD, Tom must take annual RMDs over his life expectancy beginning in 2021.

    While the excise tax applies to an RMD that is not taken for a year, it is automatically waived for Tom for 2021, 2022, and 2023.

    B. A successor beneficiary, where the primary beneficiary was taking life expectancy distributions.

    This provision applies to traditional, SEP, SIMPLE, and Roth IRAs.

    Example 2

    75-year-old Sally inherited a traditional IRA from her 77-year-old sister Carla in 2020. Sally is an eligible designated beneficiary because she is ‘not more than ten years younger’ than Carla.

    Sally must take annual distributions over her life expectancy, beginning in 2021. The 10-year rule does not apply to Sally because she is an eligible designated beneficiary.

    The automatic waiver does not apply to Sally because she is not subject to the 10-year rule.

    Sally died in 2022, and her IRA was inherited by her son, Tim.

    Tim, the successor beneficiary of Carla’s IRA, must continue taking distributions over Sally’s life expectancy beginning in 2023. Tim must also ensure that the IRA is fully distributed no later than 2032, which is the 10th year after Sally’s death.

    While the excise tax applies to an RMD that is not taken for a year, it is automatically waived for 2023 for Tim.

    While other beneficiaries could qualify for waivers under other circumstances, these are the only two types that qualify for the automatic waiver discussed in this article.

    Are ‘catch-up RMDs’ required?

    A catch-up distribution is optional for those qualifying beneficiaries who did not take their RMDs for any or all three years (2021, 2022, and 2023). However, they must still meet the 10-year deadline. For instance, in the case of Tom in Example 1, he must still ensure that his inherited IRA is fully distributed by the end of 2030 despite the waiver of the excise tax.

    No special tax forms or tax reporting required

    Generally, IRS Form 5329 must be filed for an RMD not taken by the deadline, and any excise tax included as ‘additional taxes’ on the individual’s tax return. But an exception applies where there is an automatic waiver. Resultantly, beneficiaries who qualified for the automatic waiver discussed herein need not file IRS Form 5329 for any RMDs not taken for those years.

    Should these beneficiaries wait and see for 2024?

    One of the common questions about this automatic waiver is whether it will be extended for 2024. There is yet to be an indication from the IRS that it will. There is still time for those who prefer to wait, as the deadline for taking the 2024 RMDs is December 31, 2024.

    The IRS’s first notification of the excise tax waiver was published in July of 2022, explaining the excise tax was waived for 2021 and 2022.

    The second notice, extending the waiver to 2023, was issued in July 2023. It would be reasonable to assume that any notification of an extension of the waiver could be issued later in the year.

    To take or not to take a 2024 RMD

    Beneficiaries should consider the impact of not taking RMDs for 2024, even if the excise tax is waived. Not taking an RMD for 2024 means bunching up the distributions over a period that is one year shorter, causing larger RMD amounts for the remainder of the ten years. However, a waiver might be a welcome solution for a beneficiary who needs to shift the income from 2024 to a later year for tax and other financial planning reasons.

    The consequences of missing the 2024 deadline

    Failing any further extension of the automatic waiver provision, a beneficiary who misses the deadline for taking their 2024 RMD will owe the IRS an excise tax of 25%. This excise tax is reduced to 10% if the shortfall is corrected in a timely manner.

    If a taxpayer misses the RMD deadline due to reasonable error, their tax preparer may request a waiver of the excise tax when filing IRS Form 5329.

    Reminder: RMD rules, including the ones discussed in this article, also apply to employer plans. However, plan administrators administer RMDs. Employees and beneficiaries with assets under employer plans should contact the plan administrator for assistance with their RMDs.


    Copyright ©2024 Horsesmouth, LLC. All Rights Reserved. Horsesmouth, LLC is not affiliated with Lane Hipple Wealth Management Group or any of its affiliates. Information contained above is accurate as of 2/2/24. It is subject to legislative changes and is not intended to be legal or tax advice. Consult qualified tax advisors regarding specific circumstances. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness are not guaranteed, and all warranties expressed or implied are hereby excluded. Seek legal, tax, and investment advice from qualified professionals.

  • Employee Stock Ownership Plans for Executives

    Tips to navigate ESOP suitability within the context of financial planning strategies

    Employee Stock Ownership Plans (ESOPs) have emerged as a popular mechanism for companies to foster employee ownership and align the interests of employees with those of shareholders. For seasoned executives, considering participation in an ESOP entails a careful evaluation of the potential benefits and risks involved.

    Benefits of ESOPs for Seasoned Executives

    Ownership and Alignment of Interests: ESOPs grant employees, including seasoned executives, a direct stake in the company’s performance and financial success. By owning shares of the company, executives are motivated to work towards enhancing shareholder value, fostering a sense of ownership, commitment, and alignment of interests across all levels of the organization.

    Wealth Accumulation and Retirement Planning: Participation in an ESOP provides seasoned executives with an opportunity to accumulate wealth over time, leveraging the potential appreciation in the value of company stock. ESOPs can serve as a valuable component of executives’ retirement planning strategies, allowing them to build a diversified portfolio of assets while benefiting from potential tax advantages associated with qualified retirement plans.

    Tax Deferral and Liquidity Options: ESOP contributions are typically made with pre-tax dollars, allowing participants to defer taxes on the value of the contributed shares until distribution.

    Additionally, ESOP participants may have access to various liquidity options, including the ability to sell shares back to the company or on the open market, providing flexibility in managing their investment portfolio and liquidity needs.

    Retention and Incentive Alignment: ESOPs can serve as effective retention tools for seasoned executives, incentivizing long-term commitment and loyalty to the company. By offering a stake in the company’s ownership, ESOPs reinforce the executive’s connection to the organization’s mission, values, and long-term success, fostering a culture of employee engagement and dedication.


    RELATED: Understanding Stock Options: ISOs, NQSOs, & Restricted Stock


    Risks and Considerations for Executives

    Concentration of Risk: Participation in an ESOP exposes seasoned executives to concentration risk, as their investment portfolio becomes heavily weighted towards company stock. In the event of adverse developments or underperformance of the company, executives may experience significant declines in the value of their ESOP holdings, potentially jeopardizing their financial security and retirement goals.

    Lack of Diversification: ESOP participants may face limited diversification options, particularly if the company’s stock represents a substantial portion of their investment portfolio. Without adequate diversification, seasoned executives may be vulnerable to market volatility and sector-specific risks, underscoring the importance of implementing sound diversification strategies to mitigate downside risk.

    Liquidity Constraints: Unlike publicly traded stocks, shares held in an ESOP may have limited liquidity, making it challenging for seasoned executives to convert their holdings into cash when needed. Illiquid ESOP shares may pose liquidity constraints and inhibit executives’ ability to access funds for personal financial goals, necessitating careful planning and consideration of alternative liquidity options.

    Regulatory and Fiduciary Compliance: ESOPs are subject to a complex regulatory framework governed by ERISA (Employee Retirement Income Security Act) and other federal and state laws. Seasoned executives serving on the board of directors or as trustees of the ESOP bear fiduciary responsibilities and must adhere to strict compliance requirements, including the duty to act prudently and in the best interests of ESOP participants.

    Navigating the Decision Process with Care

    For seasoned executives contemplating participation in an ESOP, the decision entails a nuanced assessment of the potential benefits and risks in light of their financial objectives, risk tolerance, and long-term outlook.

    Consultation with financial advisors, legal experts, and other professionals can provide valuable insights and guidance in navigating the complexities of ESOPs and evaluating their suitability within the broader context of executives’ financial planning strategies.


    Copyright © 2024 FMeX. All rights reserved.
    Distributed by Financial Media Exchange.

  • Love and Money: What to Do When Your Spouse Won’t Talk About Finances

    If Financial Communication Doesn’t Come Naturally, You’re Not Alone

    Money conversations with your spouse are imperative when you want to achieve joint goals, and yet they don’t always come easily. Money is a very personal topic, and many people are not accustomed to discussing it. It can be downright perplexing when your spouse refuses to work on a budget with you, create financial goals and objectives, or talk about a habit that may need to be addressed. Perhaps they are actively avoiding or even refusing to discuss a specific issue, or maybe they simply fail to engage when you raise a topic. Regardless, if you want to jump-start money conversations with your spouse, it’s helpful to first begin with why they are practicing avoidance.

    There’s almost always a root cause for tension about money in a relationship. A survey conducted by the  American Psychological Association found that almost one-third of adults with partners reported that money is a major source of conflict in their relationships. Your significant other’s feelings (or fears) about money may come from a myriad of experiences that may lead them to be non-communicative. Perhaps they have experienced a past financial failure, or feel financially unskilled, or they could even be keeping a financial secret.

    If talking about money usually leads to conflict between the two of you, then pause to give some thought to what the underlying issues may be. While you may not arrive at a solution right away, it’s still important to determine the ‘why’ so you can move towards having money conversations with your spouse that are useful, if not entirely harmonious. With this in mind, approach the conversation in a general manner as opposed to focusing on a specific money issue. This may give you some insight into your spouse or partner’s general feelings about money. Here are six pointers to keep the conversation productive:

    1. Invite your partner to have a conversation and set a time and date for it, rather than springing the topic on them.
    2. Use inclusive “us” language that promotes and supports the two of you as allies and teammates.
    3. Avoid bringing up specifics so that you are not implying blame.
    4. Identify some shared goals and focus on them.
    5. Listen carefully to your partner and don’t interrupt or correct them.
    6. Maintain a calm demeanor and display openness to their thoughts.

    If you believe that having this conversation will be too difficult, you might consider inviting a trusted third party to help facilitate. A financial advisor can often fill this role for a couple with multiple financial issues or planning matters to discuss.

    Put the Focus on a Team Approach

    Let’s dig into the second point above a bit more. It’s quite common for money conversations with your spouse to become contentious if you feel like you’re at odds, rather than on the same team. It’s also common for spouses to have different ideas and habits concerning spending and saving, organizing a budget, or using credit cards. This doesn’t mean you can’t successfully work together. It may just take a bit more effort – and more structured money conversations with your spouse – to learn how to take a team approach to accomplish your goals. It’s not just your finances that can benefit either. A 2021 survey by Fidelity Investments about couples and money found that couples who communicate well about money experience positive benefits in their overall interactions with one another.

    As the two of you talk, make an effort not to lay blame or focus on previous mistakes or missteps. Bringing up the past or reminding them of your ongoing efforts to educate them about finances and money will most likely prove counterproductive. Bring the perspective of this being a fresh approach, where you can start anew and move forward together as a team. Talk about what might work best for the two of you, such as watching a video series or working together with a financial advisor who can help guide you toward improved financial literacy.

    Initiate Solutions to Face the Challenges

    You might think you’re keeping the peace by not addressing your partner’s lack of communication about money, but this is a misguided approach in the long run. It amounts to ignoring a problem that may only grow larger and be harmful as time goes on.

    Though challenging at times, money conversations with your spouse are critical because they help ensure that the two of you participate together in your finances. If your partner expresses that following a budget will cause them anxiety and stress, and you therefore allow them to do as they please, you are really only reinforcing their ability to remain removed from the process. However, you need a household budget, and that takes two people who are willing to work as a team to meet both of your goals and create financial security.

    It may be up to you to find a solution that will bring your partner to the table. Using the household budget as an example, perhaps you can re-work and streamline the spending categories such as dining out and entertainment, and identify a single dollar amount that is their monthly discretionary spending limit. You may want to consider working from a cash budget that basically eliminates the ease of using credit and debit cards so you can only spend the cash in your wallet.

    Take Your Time with Your Approach

    When you are the financially minded partner in the relationship, you might be very eager to have money conversations with your spouse. Remember to give your partner the grace to grow and become comfortable in their role. It takes patience, and it may be a slow process to build your partner’s willingness to talk about money and adopt a team mindset about household finances. There will likely be times when one or both of you will slide back into old habits and patterns. Try to be aware of these times and resist laying blame, bringing up former disputes, or shutting down altogether.

    In fact, since we are all fallible, it can be helpful to be prepared for the inevitable course corrections on your journey together. A few phrases that may be helpful to use when it seems like money and marriage matters are going off-course:

    • I don’t think either of us is comfortable with this situation, so let’s work together to get out of it.
    • Let’s give ourselves some time to be thoughtful and write down why we’re feeling so frustrated right now.
    • Let’s identify a goal that we share and are excited about and brainstorm together about how to achieve it.

    It’s good to have a “reset plan” that works for both of you. Keep it handy and use it as needed so you can stay on a positive course as you manage money and marriage together.

    Love and Money: Have Better Money Conversations with Your Spouse

    While it can be frustrating to feel like you’re alone in the financial part of your relationship, remember that learning to talk about money with your partner is a process. Money conversations with your spouse won’t always come naturally, and they won’t always be comfortable. Persist, however, because money issues can impact many parts of your lives, and thus have a negative impact on other areas of your relationship. The tips in this article may help you gain some forward momentum in money conversations with your spouse but be sure to reach out to Lane Hipple if you think you could benefit from professional guidance.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • New Year, New Goals: Planning Your Money Moves for 2024


    Smart Money Moves: Will You Start the New Year with a Roadmap to Success?

    The coming of a new year inspires much thinking and planning. You may be looking for ways to structure and organize your life to be prepared for a brand-new year, especially when it comes to your personal finances. As you plan your money moves for 2024, it’s important to consider both short- and long-term goals. It’s also beneficial to arrange finances for emergencies or unexpected situations. How should you plan your money moves for 2024 to ensure economic stability and prosperity? Here are key strategies to consider.

    List Short-Term Goals

    When people discuss personal finances, they tend to think in generalized terms. How much wealth have they accumulated? How are their finances positioned for the future? Will they be able to retire comfortably?

    While all of those objectives are important, you still have to live in the present. This means taking care of short-term needs that may arise within the next few years. Your money moves for 2024 should account for these smaller-scale goals and unexpected events.

    Short-term goals can include:

    • Paying down credit debt
    • Building an emergency fund
    • Saving for vacation
    • Purchasing new appliances
    • Exploring additional income streams
    • Renovating or improving your home
    • Planning for marriage, children, relocation, or other life transitions

    Many other goals and ambitions can be characterized as short-term needs. Whatever they are, make room for them in your plans for money moves in 2024. You may have big ideas in mind for the future, but you still need to live day to day. Plan your finances to take care of the present, too.

    Articulate Long-Term Goals

    While you’ve got to consider your short-term financial goals, it’s essential to keep your long-term goals in sight, too – even though these are goals that won’t be met for years, or even decades down the road. They can include:

    • College tuition for children
    • Saving for retirement
    • Paying off a mortgage
    • Starting a business
    • Planning for long-term healthcare needs
    • Achieving financial independence
    • Establishing a legacy

    Thinking about long-term goals can be frustrating at times because they often feel aspirational. You can expect to make gradual progress – even slow at times – which can be a hit to your motivation. It’s not necessarily easy to track your success in meeting them. However, it’s very beneficial to itemize them while you’re still working to set a framework for your future.

    Keeping these goals uppermost in mind will help you make more responsible financial decisions now, planning your money moves for 2024 to pay off handsomely in the future.

    Identify Middle-of-the-Road Goals

    Sometimes, it’s hard to determine whether a certain financial goal or need is short- or long-term. Some may consider buying a home within 10 years to be a long-term goal, while others who are positioned to buy a house outright might think about it as a short-term goal.

    The good news is that you don’t have to classify these middle-of-the-road goals. You can set a reasonable timeline for accomplishing them that works for you. Some of these goals might include:

    • Maximizing 401(k) contributions
    • Improving your credit score
    • Supporting charitable causes
    • Taking on home renovations
    • Growing your savings and emergency funds
    • Pursuing a “passion project”

    These goals can also be considered “active” ones that aren’t defined by time. Although many people prefer to have some sense of time for each goal, you can give yourself the freedom to identify timelines that work best for you, identifying money moves for 2024 that suit you personally.

    Make a Realistic Budget

    One of the biggest pitfalls of setting financial goals is harboring unrealistic expectations. You might expect to be able to conclude payments on your car loan within three years, but you can’t account for uncertainty or surprises. It might not even be possible to construct a timeline until you’ve been working at achieving your goals for a time.

    On the other hand, you might discover that you have the means to pay off certain debts earlier than expected. You may find yourself able to pay double your current mortgage and get on track toward an early payoff. If you’ve set a realistic budget that allows you the time and room to make alterations, you’ll find it easier to accomplish your goals.

    When you make money moves for 2024, approach them from a realistic standpoint. This goes beyond daydreaming — it means thinking rationally, preparing honestly, and putting pen to paper. Don’t be afraid to switch short- or mid-range goals to long-term goals if the situation warrants. Think about the future, but also think about how to maintain a content existence from day to day.

    Get Help with Your Money Moves for 2024

    January is Financial Wellness Month and there’s no better time to think about your financial future. If you would like to update your Lane Hipple financial plan or simply refresh your memory as to the financial goals we set out to achieve for you, please do not hesitate to reach out and schedule an appointment.

    Happy New Year!

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.