By Ted Stricker, CFP®
Clients of Bernath + Rosenberg often turn to us to help them fulfill multiple legacy objectives. Whether motivated by gratitude for their own success and to fulfill religious charitable intentions, a desire to support both family and causes close to their heart, or the recognition that giving can be part of a sophisticated tax strategy, we help them transform these honorable goals into an effective multi-faceted plan.
The magic of strategic philanthropy and legacy planning lies in the possibilities of aligning your own values with your financial plan while potentially providing significant tax advantages. Since tax efficiency and charitable/legacy planning are two of our core services, we are well-suited to discuss how this is accomplished.
Understanding Your “Why” Before Your “How”
Before delving into the techniques of charitable giving, we encourage you to reflect upon what is truly meaningful to you and your family. Are you looking to support a specific cause that’s touched your life? Create a lasting family legacy and income resource? Reduce your tax burden while doing good? It’s often a combination of these factors.
This reflection matters because different goals lead to different strategies. As an example, if you wish to involve your children in philanthropy (such as within an annual family “tzedakah discussion”) to teach and pass on family values, you might choose a different approach than someone primarily focused on minimizing estate taxes. There’s no one-size-fits-all solution, which is why personalized planning is so crucial.
Your Charitable Giving Toolkit: Options for Many Situations
Direct Giving: Simple, but Not Always Optimal
The most straightforward approach—writing a check to your favorite charity or to family members—remains popular for good reason. In 2025 and 2026, a person may use their annual gift exclusion of $19,000 per recipient to gift directly to family members and may gift other amounts directly to qualified charities and receive the tax deduction, if itemizing. Both are simple, immediate, and direct charitable contributions provide an itemized deduction. However, if you’re nearing retirement for example, we often recommend more tax-efficient alternatives.
Bunching Strategies: Maximizing Tax Benefits
With the increased standard deductions ($15,750 filing single, $31,500 for married filing jointly in 2025), many find their charitable contributions may no longer provide tax benefits (this may continue in 2026). “Bunching” involves concentrating multiple years of giving into one year to exceed the standard deduction threshold.
For example, instead of donating $10,000 annually for three years, you might contribute $30,000 in year one, potentially creating a significant itemized deduction, then use the standard deduction in subsequent years two and three.
Donor-Advised Funds: Flexibility Meets Tax Efficiency
Donor-advised funds (DAFs) have become increasingly popular among our clients, and for good reason. You receive an immediate tax deduction when you contribute to the fund, but you can recommend donations to charities over time based on your family’s values. This provides exceptional flexibility, perfect for those years when you have unusually high income from selling a business, exercising stock options, or realizing significant capital gains from highly appreciated stocks.
We’ve recommended this DAF strategy to our executive clients, since it is particularly effective when dealing with concentrated stock positions. Contributing appreciated securities (such as RSUs, see below) directly to a DAF allows you to avoid capital gains tax while receiving a deduction for the full market value.
Qualified Charitable Distributions: The Retiree’s Secret Weapon
For clients over 70½, qualified charitable distributions (QCDs) from IRAs offer remarkable benefits. You can donate up to $108,000 directly from your IRA to qualified charities and while you don’t receive a tax deduction, the distribution doesn’t count as taxable income.
This strategy is particularly powerful for those who don’t need their full required minimum distribution (RMD) for living expenses. By reducing your adjusted gross income, QCDs can help minimize Medicare premiums, reduce taxation of Social Security benefits, and potentially keep you in a lower tax bracket.
Designate a Charity As a Beneficiary
Public charities don’t have to pay income tax on donated assets, making them ideal beneficiaries of IRAs or employer-sponsored retirement accounts. This means your donation will be directed to support your cherished causes after your lifetime. For those with a smaller IRA or where heirs will receive other assets with lower tax implications, this technique can be effective to satisfy charitable objectives.
Charitable Remainder Trusts: Income and Impact
For clients with significant appreciated assets, charitable remainder trusts (CRTs) can provide income during retirement while supporting charitable causes. You transfer assets to the trust, receive income for yourself for life (or up to 20 years for loved ones), and the remainder goes to charity. Trusts are also effective tools for other estate planning objectives.
CRTs work particularly well for highly appreciated assets with a low cost basis. As an example, let’s say a person owned company stock worth $2 million with a basis of just $200,000. The CRT strategy might allow them to diversify without immediate capital gains tax, generate lifetime income for them or limited period income for family members, and ultimately benefit their chosen charities.
Special Considerations for Executive Compensation
Executives may have unique opportunities for charitable giving through their compensation packages. Restricted stock units (RSUs), stock options, and deferred compensation plans each present distinct planning opportunities.
For instance, if you’re facing a significant RSU vesting event, contributing shares directly to charity or a DAF immediately after vesting can offset the income tax burden while supporting causes you care about. The key is planning ahead; these strategies work best when integrated into your overall compensation and tax planning.
The Family Legacy Dimension
Charitable giving often becomes a powerful tool for transmitting values across generations. We help families establish giving traditions that involve children and grandchildren in philanthropic decisions. This might mean creating a family foundation, establishing a giving committee for a donor-advised fund, or simply including family members in annual giving decisions.
A family might hold an annual “giving meeting” where each member presents a charity they’ve researched, thereby establishing a cherished tradition that teaches financial literacy, social responsibility, and family values simultaneously.
Common Pitfalls to Avoid
Through years of helping clients navigate charitable giving, we’ve identified several common mistakes:
Giving cash when you could give appreciated assets. If you’ve held stocks or mutual funds for more than a year with significant gains, donating them directly is almost always more tax efficient than selling and donating cash.
Overlooking employer matching programs. Many companies match employee charitable contributions, effectively doubling your impact at no additional cost.
Failing to document donations properly. The IRS has specific requirements for charitable deductions. Keep detailed records, especially for non-cash contributions.
Not considering the timing of contributions. Year-end isn’t always optimal. Consider your income fluctuations, tax bracket changes, and other financial events when timing major gifts.
The intended charitable organization is not a 501(c)(3) public charity. Particularly with DAFs, a recipient charity must be an IRS 501(c)(3) organization. State-registered charities may not qualify for DAF donations.
Your Next Steps
If you’re ready to make your legacy planning more strategic and impactful, consider these action items:
1. Review your current giving pattern. Are you maximizing tax benefits? Could bunching multi-year contributions or using a DAF strategy make sense for you?
2. Examine your portfolio for appreciated assets. These often make better gifts than cash, especially if highly appreciated and in tandem with portfolio management strategies.
3. Consider your retirement income sources. If you’re over 70½, QCDs might be your most powerful giving tool. Those who are or will be in RMD status should coordinate this strategy with tax, income, and legacy planning.
4. Think about your legacy. How do you want to be remembered, and how can charitable giving reflect your values and those of your family? What are your goals regarding a legacy to your family versus your community or charitable causes? Would a private family foundation be attractive to your loved ones where they could participate and express their own values and charitable intentions as well?
5. Get professional guidance. The interplay between charitable giving, taxes, and retirement planning is complex. A comprehensive review can uncover opportunities you might have missed.
If You Have Legacy Planning Questions, Let’s Have a Discussion!
Choosing and implementing legacy planning strategies can be confusing and complex, but our team is here to help!
By coordinating your estate and tax strategies with your overall financial planning and long-term goals, our assistance could be beneficial to your financial future. With our Certified Public Accountants and CERTIFIED FINANCIAL PLANNER® professionals, Bernath + Rosenberg stays current with the latest in tax laws and planning strategies to help you pursue a rewarding and comfortable retirement as well as leave a lasting legacy, according to your unique and special objectives.
To get started in creating a solid, tax-efficient estate plan in 2026, schedule a meeting by calling (212) 221-1140 or email tstricker@brwealth.com.
Frequently Asked Questions About Legacy Planning
1. How do charitable strategies fit into my overall tax planning approach?
Charitable strategies work alongside broader tax and legacy planning by accomplishing several integrated techniques. When coordinated with your financial plan, gifting can help lower future estate taxes, shift appreciating assets out of your estate, and support long-term wealth transfer goals to family members or cherished causes.
2. Which gifting techniques offer the biggest tax planning benefits for myself and my family?
Annual exclusion gifts, direct payments for tuition or medical expenses, and strategic use of your lifetime exemption are among the most effective approaches. These strategies can remove significant value (and future appreciation) from your estate, making them powerful tax planning tools when used consistently.
3. When should families seek professional guidance for gifting and tax planning?
Because gifting rules, exemption limits, and estate tax laws change over time (especially in 2026), it’s smart to work with advisors when making large gifts or using trusts. A coordinated team can help integrate gifting decisions into your overall tax planning so your strategies remain compliant, tax efficient, and aligned with your family’s long-term goals.
About Ted
Ted Stricker is a partner and financial advisor at Bernath + Rosenberg, a full-service accounting, tax, and wealth management firm with offices in Monsey, NY, Lakewood, NJ, Cedarhurst, NY, and Miami Beach, FL. The firm demonstrates a personalized approach to custom-tailored solutions and an unwavering commitment to client service. With over 26 years of experience in the financial services industry, Ted manages the firm’s wealth management team, and specializes in designing financial plans for business owners and affluent families. Since joining the team in 2015, he provides practical and sound advice, combining innovative approaches and solutions that reflect clients’ personality, lifestyle, and goals.
For the ninth year in a row, Bernath + Rosenberg has been named as one of the leading CPA firms in financial planning by Accounting Today, a publication that receives hundreds of submissions each year and features the Top 150 Firms in the nation. Ted is a CERTIFIED
FINANCIAL PLANNER® practitioner and is a member of the Financial Planning Association. To learn more about Ted, connect with him on LinkedIn.
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