“DAFs are an excellent tool to gift money and divide it among favorite charities while gaining a sizeable tax deduction,” said Belardino. Clients can take multiyear deductions in one tax year while spreading their gifts to charities over multiple years. The strategy has helped smaller and larger clients to be in lower state and federal tax brackets, he said.
Barnum has seen many high-net-worth individuals leave for more tax-friendly states, such as Florida, Massachusetts and South Carolina, said Belardino. “This is a byproduct of the lack of state and local deductions,” he said, “as well as clients’ desire to be in a more generally tax-friendly state in retirement.” Barnum has long served many clients beyond Connecticut, so it’s not a problem to keep them as clients when they move, particularly with today’s communications, he said.
AEPG also leverages technology to retain clients moving to lower-tax states. The firm is able to WebEx all its financial planning functions, said Kaye. “Once our clients get addicted to our portal, our consistent performance and our ‘consistently good advice in a constantly changing world’ [the firm’s registered motto],” he said, “they become extra loyal.”