Hurricane Helene: Relief Efforts, Financial Support and Property Damage

How Can You Provide Financial Support for Hurricane Helene Relief?

1. Direct gifts through charitable websites – to the extent you feel comfortable doing so, many organizations can take payment cash gifts online – probably the easiest way to give.
2. Supplies and necessities – save your receipts – still tax deductible.
3. Donor Advised Funds – if you have one already established and funded, it’s a great way to get money out the door fairly quickly. If you want to learn more, please let us know. Fidelity and Schwab both have these capabilities. Keep in mind, though, in most cases a check gets mailed; so, depending on the logistics of what charity you are giving to and where they are physically located, it could take time to deliver.
4. Gift of appreciated securities – many large organizations have the ability to accept gifts of appreciated securities, but it’s likely many smaller organizations may not. When an individual sells an appreciated security, they are subject to a capital gains tax on the difference between their cost basis (commonly the purchase price) and the current market value. Charitable organizations exempt as a 501(c)(3) have the ability to take possession of that appreciated security, sell it themselves, and not be subject to tax. There is a double benefit of the income tax deduction to the donor and the avoidance of the capital gain.
5. Qualified Charitable Distributions – are you over the age of 70.5? Do you have an IRA? The IRS mandates at various ages above age 70.5 that you draw down your pre-tax retirement account at some minimum amount each year. The IRS has a rule that up to $100,000 of your IRA can be gifted each year directly to charities and you do not pay income tax on the amount. The amount of your Qualified Charitable Distributions counts toward your Required Minimum Distributions too.
6. Gifts to impacted individuals – you may feel your money is better utilized helping individuals directly – family, friends, strangers in need. This is an incredible opportunity to help folks out but will not allow for a charitable deduction. That is okay; not everything has to be about a tax savings. Currently, you can give any individual up to $18,000 per year without having to subject yourself to gift tax. Under current gift tax laws, you can gift an extraordinary amount to individuals without actually paying a gift tax ($13.61M per individual lifetime). And even if you gift more than that $18,000, you can file a simple gift tax return formally documenting your gift and applying it to your lifetime exemption without triggering the gift tax.  
7. Loaning money to Individuals – a different form of helping individuals depending on your preferences and situation. There is a minimum interest rate published by the IRS, referred to as an AFR rate, to charge the borrower for a loan to avoid gift tax reporting. You likely want to formalize the loan with legal documents. Interest received on the loan is taxable as ordinary income. It can be structured with fairly flexible terms.

Do You Have Property Damage from Hurricane Helene?

1. Document everything you can as quickly as you can so you can provide proof of damage.  
2. Contact your insurance agent or carrier to be reminded of your coverage and to get the process started for a claim – an adjuster will be assigned to review your property and log their observations of the damage.
3. Save receipts – any cost you incur can be reimbursed by insurance if it is a covered loss under your policy. You’ll need the receipts. Remember, you’ll have a deductible to meet before reimbursement can occur. Even if not reimbursable, your receipts may add to your house cost basis.
4. Get quotes – whatever damage you incurred, be sure to get quotes on repair.
5. Be patient and advocate for yourself – unfortunately with a storm this widespread it will likely take time to get everything sorted out. 

Preparing Financially for Natural Disasters

1. Have a proper emergency fund for the unknown or unpredictable.
2. Review your current property and casualty insurance to ensure you know what is covered and not covered and determine whether you have any gaps. Think about your valuable personal possessions as part of this – wedding rings, watches, jewelry, art, etc.
3. Have flexible access to capital – cash, emergency fund account, credit cards (responsibly), home equity lines of credit, etc.
4. Have digital copies of sensitive documents – estate plans, powers of attorney and healthcare documents, insurance policies and appraisals, important tax documents, birth/marriage certificates, etc.