Philanthropy during your lifetime is the best and most effective way to share not only your money but also your values with others. Creating or revising an estate plan is the last chance you have to pass on more than money to your heirs, shape your legacy and help create a better world after you’re gone.
Cesar Chavez said: “True wealth is not measured in money or status or power. It is measured in the legacy we leave behind for those we love and those we inspire.”
What is a legacy? Is it how you’re remembered, or how the values and parts of life you cherish are preserved and transmitted to others?
Denver estate-planning attorney Stephanie Tuthill says, “There is a difference between the type of legacy that recalls the person and the legacy that inspires other people to continue the person’s work.” Few people are remembered 100 years after their death, but the principles in which they believed can be meaningfully and powerfully recognized and passed from generation to generation in an estate plan.
It is important to carefully select stable and effective nonprofits to receive your bequest. Any significant gift intended to support a nonprofit’s specific program or initiative should be discussed with the charity during the donor’s lifetime to ensure it has the capacity and desire to implement the donor’s wishes.
Denver estate-planning attorney Kathleen Johnson suggests “bringing nonprofit beneficiaries into the loop during the planning stages. If the client and the nonprofit beneficiary are on the same page, the client will have a lasting impact with their gift.” Bequests to nonprofits should not be so restrictive as to limit their utility over time as circumstances and programs evolve.
One critical issue to be determined is how much to leave to children and other heirs, and how much to donate to charity. Billionaire Warren Buffett thinks the perfect amount to leave children is “enough money so that they would feel they could do anything, but not so much that they could do nothing.” After leaving bequests to his family, Buffett has dedicated the rest of his fortune to philanthropy.
Parents are justifiably concerned that leaving too much money to children and grandchildren can do more harm than good by taking away their motivation to achieve their own success. Denver philanthropist Tim Marquez put it this way: “If I hated my kids, I’d leave them a lot of money.” A recent survey by U.S. Trust revealed only 49 percent of wealthy individuals feel that leaving a financial inheritance is personally important.
Estate-planning attorneys have many tools to help clients achieve their philanthropic goals. Current estate-tax-exemption levels combined with unusually low interest rates make it worthwhile to ask an attorney about some of those tools and techniques now. Although Congress may change estate-tax laws in the future, many attorneys recommend creating philanthropic plans under existing law to take advantage of current opportunities and changing those plans later if the laws are modified.
In the next 40 years, more than $40 trillion will transfer between generations in the U.S. Imagine what could be accomplished if just 25 percent of that sum were used to cure diseases; educate and feed the world’s children; create renewable sources of energy; and more.
In the words of Nelson Henderson, “the true meaning of life is to plant trees under whose shade you do not expect to sit.”
Just as we are grateful for the trees that were planted before us, we have the opportunity and the obligation to do the same for the generations to follow.
Nonprofit of the month
Founded in 1872, Jewish Family Service of Colorado is a nonsectarian, nonprofit human-services agency serving metro Denver and Boulder, helping seniors age in place, providing mental-health counseling to individuals and families in distress, offering training and placement services to those with barriers to employment, and providing crisis intervention and food to people in need. Every year, JFS benefits more than 23,000 people of all ages, faiths and incomes. jewishfamilyservice.org
Bruce DeBoskey is a Colorado-based Philanthropic Advisor. Reach him at firstname.lastname@example.org.