Fall 2008

We’re taking a breather from estate tax topics while we wait for election results.  Our Trusts & Estates Group recently read and discussed a challenging article from the New York Times Magazine entitled What Should a Billionaire Give – and What Should You?  In it Peter Singer challenges the wealthy to give away significant amounts during their lifetimes.  There are fascinating examples of people who have done so, and admirable attempts at calculating the amount needed from each of us to eliminate starvation in the world.  
This is thought-provoking, and for many of us feels a bit in-your-face.  A more comfortable approach, certainly, is to make our larger financial contributions as legacies from our estates.  Many of our clients have done and are doing such things.  An estate plan is often made more interesting and energizing with a charitable element (as well as doing, at least in conventional wisdom, a morally good thing).  Here’s one example:
A father lost one of his four children in a car accident at age 25.  Of course this is something a parent never gets over, but he tried to make some good of it by establishing a scholarship fund for graduate students of special education at the state university where his daughter had worked as a volunteer.  He made a two-part endowment agreement.  The endowment will be funded from his estate.  While living, he has made annual contributions to be used currently for scholarships.  It has done and will do good for grad students and their special education students, and it helped to turn bitter to at least bittersweet for the father.  
Here’s a way to look at the “cost” of including charity in your Will.  Let’s say you provide for 10% of your estate for your favorite causes.  That means, even assuming no estate tax benefit, that your kids will get 90% of what they would otherwise have gotten.  If your estate is large, then 90% of a lot is still a lot.  If your estate is small, then 90% of not very much is still not very much.  
 
If you'd like to discuss this or any other aspect of your estate planning, please call the attorney with whom you work, or any of the members of our Trusts & Estates Group. Thanks.