Small businesses represent nearly 1/3 of the value of affluent decedents’ estates. Every gift planning advisor needs to understand how to apply and discuss gift planning options that appeal to small business owners. Business owners represent some of the most creative and dedicated donors and they want to support our charities with gifts “from” the business as well as gifts “of” the business.
However, just as each donor needs to be treated uniquely, the business structure that our donors use to operate their business also needs to be treated uniquely. A gift of a general partnership interest carries a much different risk profile than a gift of a regular C-Corporation. Accordingly, we need to adapt our due diligence review process, donor stewardship process and set different expectations based on the business structure.
This session reviews the types of business structures and describes the different due diligence steps that need to be taken based on the business structure.
By using Case Studies, this presentation will describe several ways business owner donors can make a charitable gift while selling their business interest to the donor's family, to the company or to an outside purchaser. The Case Studies will be designed so that the following topics are addressed during the course of the presentation: Assignment of Income; Step Transaction, Excess Business Holding, Unrelated Business Income, Risk Management, Effect of Business Structure on the Charitable Gift (e.g., S-Corporation, C-Corporation, Partnership, or LLC), Qualified Appraisal Requirements, and Avoiding Excess Benefit Transaction taxes.
- Learn how to respond to your client's requests to use their biggest asset to make the most difference in their community.
- Learn how the distinctions between S-Corporations, C-Corporations, Partnerships, and LLCs matter for charitable giving.
- Learn how their due diligence review must be different based on your donor's business structure.
Gregory Baker, JD, ChFC®, CFP®, CAP®, Renaissance Philanthropic Solutions Group
Gregory W. Baker has over 25 years’ experience in trust, tax and philanthropic financial planning. As Renaissance’s Executive Vice President of Legal Services, Mr. Baker works directly with client’s attorneys, other advisors, and Renaissance staff regarding charitable gift, investment, retirement, estate, and tax planning and the wide array of assets held by affluent clients. Mr. Baker has consulted on over 20,000 charitable remainder trusts, over 800 charitable lead trusts, numerous private foundations, supporting organizations, donor-advised funds, and charitable gift annuities.
Prior to re-joining Renaissance in 2002, Mr. Baker was Vice President, Manager of Charitable Account Services in Princeton, N.J. for Merrill Lynch Trust Company and the Merrill Lynch Center for Philanthropy & Nonprofit Management. While at Merrill Lynch, he spoke at numerous seminars for individual clients, charities and internal personnel regarding charitable gift planning, appropriate trust funding, asset allocation, investment modeling, and tax concerns.
As Merrill’s Charitable Fiduciary Risk Manager, Mr. Baker identified and managed account compliance projects for over $4 billion in planned gift instruments under administration including: charitable remainder trusts, charitable lead trusts, private foundations, supporting organizations, pooled income funds, charitable gift annuities, donor-advised funds, field of interest funds, and charitable endowment accounts. Mr. Baker has extensive knowledge about making charitable gifts with the following types of assets: stocks, bonds, mutual funds, exchange funds, real estate, partnerships, limited liability companies, S-corporations, C-corporations, tangible property, and restricted securities.
Before joining Merrill Lynch, Mr. Baker was Senior Staff Attorney with Renaissance Inc. for 7 years. During his first term at Renaissance, he drafted or reviewed over 3,500 charitable remainder and lead trusts to the specifications of over 2,000 attorneys throughout the United States. He also consulted with those attorneys and other financial advisors to ensure the proper creation, funding, and administration of those charitable gift vehicles, which committed over $1 billion dollars to charity.
Mr. Baker has spoken to numerous groups regarding charitable planning including national conferences and webinars for the Hudson Institute, the National Association of Charitable Gift Planners (formerly Partnership for Philanthropic Planning), the American Academy of Estate Planning Attorneys, the International Association of Advisors in Philanthropy, Life Stewardship Institute, the Kiwanis, and the Society of Financial Service Professionals, the annual meetings for several statewide FPA chapters, AFP chapters, PPP councils, estate planning councils, bar associations, national, and regional producer groups for several broker/dealers, for Professional Education Systems Institute, and for Lorman Education Services. Mr. Baker has been published in Planned Giving Today, the Estate Planning newsletter of the Society of Financial Service Professionals, Perspectives newsletter, ProducersWEB.Com, and various broker/dealer publications.
Mr. Baker is a past Board Member of the National Association of Charitable Gift Planners, past President of the Planned Giving Group of Indiana, Advisory Board member for the CAP program at the American College, member of the Indiana Bar, the Indiana State Bar Association, and the Financial Planning Association. He graduated from Wabash College and Indiana University School of Law at Indianapolis.