Transformative Estate Planning
In last week’s blog, From Spare Change to Real Change, we talked about major and planned giving through stocks. At FUNDING matters, our goal is to help your organization allow donors to visualize the various types of assets that can be used to make a donation. In this week’s blog, we’ll be discussing charitable giving through Registered Retirement Investments. To start, let me take you back to a conversation I once had with a woman named Sophie.
Sophie’s Legacy
Back in 2008, I was advising for a non-profit home for the aged on their capital campaign. The project was an expansion and modernization of a long-term care home, and we hosted a series of donor discussions and presentations (PDX Step 4: Communication) on the topic. I specifically enjoyed teaming up with advisors that had an association with the organization (PDX Step 5: Leverage and Alliances). The presentations were initially titled “Leaving Your Legacy.” The early presentations drew a small number of attendees. It was only after following up with those who made time to attend and seeking their feedback that they greatly appreciated the tax, legal, and estate planning information acquired from the session. They knew they were getting valuable information.
As a group, we thought that the insight was helpful and wanted to continue to offer this type of advice, but instead of focusing on legacy, we pivoted and renamed the sessions “Estate Planning for You and Your Family.” Immediately, we noticed a significant increase in the turnout. By altering the focus, the session now allowed us to address the options for giving as part of both financial and estate planning. Tax-efficient major gifts and planned gifts were both woven seamlessly into the presentations.
Sophie, an elderly lady diagnosed with terminal cancer, attended all of the estate planning sessions. She would bring piles of estate planning literature from various financial institutions that she collected. She was on a mission to get educated and have meaningful discussions with her advisors.
When I ran through different scenarios using the GIFTABULATOR in the presentations, she was able to visualize various potential scenarios. Did she want to make a donation, a bequest, or both? Sophie pulled me aside, and I met with both her and her advisors over the next few months. We walked through different scenarios that may make sense for her. Sophie wanted to know how much she might pay in tax on Registered Retirement Investments.
So, I plugged in some examples both in the GIFTABULATOR Give Now (Major Gift) and Give Later (Bequest), and I showed her the outcome from the hypothetical numbers.
Then she asked, “How much tax will I owe on a $12 million Registered Retirement Investment?”
I was initially taken aback. Was she serious? She said, “Put in the numbers. I don’t want to pay taxes. I would rather see my money put to use for those organizations that are doing important work. I want to make a difference. I am a widow, and my children and grandchildren are taken care of. There will be enough for them if I donate.”
Today, Sophie’s legacy lives on at universities, libraries, and homes for the aged. All of these spaces were important throughout different stages of her life, and she had the opportunity to demonstrate her commitment to them even after she passed.
How Visualization Made the Difference for Sophie
Before our presentations, Sophie hadn’t considered a Registered Retirement Investment. She couldn’t conceive of what it would be or visualize herself doing it. She didn’t know the various types of assets that could be used to make a donation. Once she did, she was ready to do it.
Having the ability to plug in the numbers and see what it looked like helped make it real for her. The GIFTABULATOR is the tool that every organization needs for major and planned gifts. Easy to understand, use, and explain, it’s a tool that forecasts the potential for giving (and for a zero-tax bill!)
See the below screenshots and how Sophie’s estate and legacy were structured.
