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A Strategy for Giving

By Richard Schooley


What do you do when you’ve truly prepared for your family’s financial well-being? When you’re able to check off the list wealth accumulation, protecting the family, paying for education, and retirement preparation? When our clients have properly prepared for all of the basic life needs, we ask them one question:

Image of a building wall with The Best Gift Is You painted on it

What impact do you want to have in the world beyond your immediate family?

In all of our years, we’ve never had a client whose goal it was to amass as much wealth as possible before they died. We’ve had clients who enjoy the challenge of amassing wealth and experiencing success, of course. Inevitably, though, attention turns to their potential impact in the world. That’s when we ask them, why?  Is their motivation to protect their life’s work for future generations? Do they have a passion for impacting their local community or perhaps the world?  Are there causes for which they are passionate. If so, we can create strategies for their money to have an impact while they collect an income or receive a tax benefit for doing good.

Charitable Lead Annuity Trust

One such client was fortunate enough to receive significant assets passed to them through family.  They have the good fortune to live the life they’ve always dreamed and still not use all of their money. They want to have an impact on the world today, however, they’re not sure exactly where they want to make that impact. For their family, a charitable lead annuity trust allowed them to dedicate a portion of their wealth to creating annual income for gifting, while also harvesting a significant tax benefit now for promised annual donations.  In addition, we created a donor advised fund that enables the family to vary their giving to various non-profit organizations each year.  At the end of ten years, the original amount set aside—plus growth—will come back to them tax free.

Charitable Remainder Annuity Trust

Another client amassed a significant holding in a concentrated position within one company’s stock. It was highly appreciated over a 20-year period. If they liquidated the stock and given the cash as a gift, they would have realized significant capital gains. Instead, we set up a charitable remainder annuity trust into which they committed the stock.  The trust is designed to provide them with income for a specified number of years and then give the value of the stock to the charity, though it is possible there may not be residual value at the end of the trust.  Although the gift won’t happen for a number of years, our client realized the tax benefit today, and will not pay tax on the appreciated value of the stock. 

Irrevocable Trust

My wife and I have also built a very successful business with Potentia.  Though we are nowhere near a liquidation event, we want to have an impact in the world today and not wait until sometime in the future.  So, we set up an irrevocable trust and gifted part of our company equity to San Jose State Athletics, one of our favorite causes.

Every philanthropic solution is bespoke and customized based on the impact our clients desire to have in the world and the strategy that aligns with their financial goals, often allowing them to have an impact in the world while they are able to experience it. When you are ready to discuss the proper strategy to meet your priorities, the Potentia Wealth team is here to create a custom solution for you.

Your family financial health is the goal.

The simple, powerful reason to focus on your financial health is to take good care of yourself and the ones you love. We’ll help you do both.