Morgan Stanley
  • Wealth Management
  • Nov 9, 2021

Your 2021 Guide to Holiday Giving

As you reconnect with loved ones for the holidays, consider these impactful ways to give.

This holiday season, many of us look forward to connecting with loved ones and creating new, lasting memories. For some, it’s also a time for renewal, reflection and resetting. 

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As we look to close out the year on a healthy, hopeful note, consider these ways to support the causes you value and the people you care for – including yourself: 

Give to Others in Need

There are many creative and traditional ways to give back. One strategy is to contribute to a donor advised fund (DAF), such as MS GIFT, which also accepts “complex” assets such as private stock, artwork and other collectibles. Administered by a 501(c)(3) public charity, a DAF offers a simple, tax-advantaged way to support your favorite charities. If you’ve been investing for a while, you may hold securities that have appreciated significantly. When you contribute these assets to a DAF, they can stay invested and potentially grow, tax-free, until you recommend which charities you want to receive a cash donation. This gives you and your family time to decide where your gift could have the greatest impact, while reducing the potential tax hit from capital gains if you had sold the securities and donated the cash.

If you’re retired, consider donating your retirement distribution to charity. If you’re at least 70½ and are the owner or beneficiary of an IRA, you can usually make a Qualified Charitable Distribution (QCD) to an eligible organization of up to $100,000 per year directly from your Individual Retirement Account (IRA). QCDs generally come with no tax costs to you or the charity receiving the donation—allowing you to count a QCD toward your required minimum distribution for the year, if certain rules are met, reduce your taxable estate and feel good about supporting a cause you care for.1

For many, the pandemic enhanced the need to donate to organizations that helped people navigate this challenging time. One such cause that became increasingly important to support and invest in, for self and for others, was mental health.

According to Morgan Stanley’s 2021 Investor Pulse Poll among U.S. investors, 43% of respondents overall and 50% of women reported that their emotional health suffered because of COVID-19. Coupled with broader research about pandemic-related mental health strains, Morgan Stanley has taken strides to address mental health concerns in our community and beyond. 

Morgan Stanley’s Alliance for Children’s Mental Health brings together a diverse set of nonprofit organizations that aim to have a meaningful impact on children’s mental health through grant-making, thought leadership, seed-funding and engagement.

“We launched the Morgan Stanley Alliance for Children’s Mental Health to help fight the growing crisis in youth well-being,” says Joan Steinberg, President of the Morgan Stanley Foundation and CEO of the Alliance for Children’s Mental Health. “The COVID-19 pandemic and all its repercussions have taken a huge toll on children’s mental health, and now more than ever, we encourage everyone to learn more about the issues that youth are facing and become advocates for the change that is critically needed in safeguarding their mental health.”

Give to Loved Ones

Giving gifts to family members remains a cherished part of the holiday routine for many families, and the chance to reconnect may have you considering how to best give to family. These simple questions can help: 

  • Do you want to give family members a financial gift? If so, remember that you can give up to $15,000 per individual this year without having to file a gift tax return. However, gifts exceeding $15,000 per individual count against your lifetime gift and estate tax exemption of $11.7 million per individual in 2021. 
  • Does your loved one need money to pay bills or fund other basic necessities? 

—If Yes: Do they need it more this year than other years? Should you increase the amount? This might be the year to think closely about how your generosity can best help.

—If No: Are they saving toward something (education, a house, a passion project) that you could contribute to? If you know a loved one who struggles to save, funding an initiative directly, such as college tuition which is not subject to the gift tax limitations, might make a great gift.

  • Have you considered opening or contributing to a 529 plan? A 529 plan is a tax-advantaged way to save and invest, for future education costs. Earnings grow tax-free, and as long as you use the funds for qualified education expenses, they are generally exempt from tax. Anyone, including grandparents, can contribute up to $15,000 per year ($30,000 for married couples electing to split gifts) to any individual’s 529 plan per beneficiary, without incurring gift tax. In addition, you can bundle five years of contributions into one $75,000 contribution ($150,000 for married couples electing to split gifts) per beneficiary, provided you make the required election on a gift tax return for the year of the contribution. If you have the means, you could even contribute one year’s worth of gifts in December, followed by five years of contributions in January.

Give Yourself the Gift of Financial Wellness

Morgan Stanley’s Investor Pulse survey also reported that about 41% of people said they felt less in control of their life, and another 40% said their sense of security had diminished.

One way to feel more secure is to make sure you have a financial plan, based on a clear goal.

Staying focused on that goal can help you regain a sense of control and avoid getting too anxious about market volatility. When stress finds you, go back to your goal, and trust the plan. Your Morgan Stanley Financial Advisor can help.

Connect with your Morgan Stanley Financial Advisor today to discuss how you can set yourself up for a successful year-end and a bright 2022.