estate planning – FUNDING matters® Inc.

Grow A Relationship – Agree About Money

Money is often cited by relationship experts as the number one reason for relationship failure, in particular marriage. Why is money such a strong factor in determining one’s success in marriage, longevity and health?

Maybe it really isn’t money that is the major factor but that the underlying issues which relate to the money that are the problem.

How can couples get on the same page?

It is important for each partner to understand why the other feels the way they do and develop a mutual understanding. Whether it’s generosity or thriftiness, communication is the key to understanding one another’s views and unspoken preferences and bias.

When gifting is made, how are the spouse, children and charity taken into consideration?

Discussing money topics in detail is the beginning of the process. When I meet with lawyers, they tell me that couples often don’t have an idea of how to split up or allocate their life’s assets to family and community. In many cases this is the first time that the couple has given thought to who gets what. It’s not surprising then that 70% of individuals don’t have a current will.

I recently had dinner with an accountant who is acting as trustee for an estate that is being contested by two sisters in their 60s. They are not talking because they can’t agree on how to divide their mother’s antique teacups and fairly apportion her funds to her grandchildren. These sisters are literally throwing 60 years sibling friendship out of the window by failing to communicate.

Plan your estate through effective communication to ensure minimal headaches and heartaches for your loved ones and to minimize legal fees and taxation to benefit family and community.

wpetruck@fundingmatters.com
www.giftabulatorusa.com

www.giftabulator.com

www.fundingmatters.com

What Does Wall Street Know About Charitable Giving that Main Street Charities Don’t?

Did you know that major fund companies such as Fidelity and Schwab are now getting into the charity game on behalf of their clients? They are educating their advisors on how to discuss setting up donor advised funds to ensure they continue to manage their clients’ assets for generations to come.

Charities too often take the position that their donors do not care about taxes when they think about giving. I understand this if the charity is simply looking at the $50 or $500 a donor is giving; however, why would a charity give up the opportunity to build themselves into the estate and financial plans of their donors and members?

A lack of initiative by the charity will lead to declining revenues when many of their $500 annual donors pass away. The fact is that most people do not have charity built into their wills. It is then safe to assume that the charity’s donors will unlikely pass on any assets in their will to the charity or move to a higher giving amount without the proper insights and illustrations by the charity.

Clearly, financial institutions have been able to sharpen their focus on this key group of individuals who will be passing billions if not trillions to the next generation.

wpetruck@fundingmatters.com
www.giftabulatorusa.com
www.giftabulator.com

Donate to Eliminate

I was encouraged to see the Laura Saunders’ article Tax Smart Philanthropy Made Easy in the Wall Street Journal (WSJ). This has been a key element of what we have been speaking to advisors, charities and individuals about in getting their estate, financial houses in order to minimize taxation on their capital gains now and in their estates. Tax planning means that advisors and their clients need to take an inventory of all assets now and over time to ensure that what is left over and taxed can be put to other uses like philanthropy.

The WSJ article talks about the increase in popularity of Donor Advised Funds such as those offered by Fidelity, Schwab and Rowe. The other option is to give directly to charity and see the impact of your giving. The Donor Advised Fund model is a very smart approach if you are undecided about which charities you may want to leave your money to, and the taxman is not one of your chosen beneficiaries. It is also a wise strategy for future generations who will invariably be approached to give to charity. Imagine having the luxury of helping society with pre-tax dollars.

An important element in smart tax planning is being able to see or have someone illustrate to you how lowering taxes can be achieved and what is required. All too often, advisors do not spend the time to engage in these types of discussions for a number of reasons including, lack of knowledge or not having the tools to educate and illustrate these concepts to their clients. Not-for-profit organizations are equally guilty of not informing and engaging their members with the information in a concrete manner. That is why historically, the number of bequests to charities has remained in the 4% to 6% range for many years. Guess who is getting the rest after the family? You got it, the taxman.

The solution to this is GIFTABULATOR, an estate, financial and philanthropic planning app with an easy to understand model for planning purposes. GIFTABULATOR easily calculates how much money an individual will be left with, can pass on to their heirs and how much should be donated now or as part of an estate to reduce taxes at any point in the investment cycle. Can you imagine now how much you should give now to reduce your taxes on various assets? Call it Donate to Eliminate.

Laura Saunders’ article in the WSJ hits home about leaving a legacy for yourself, your family and your community.

Connect with GIFTABULATOR at app.giftabulatorusa.com

e. wpetruck@fundingmatters.com

School of Hard Knocks

I have attended the school of hard knocks when it comes to planned giving. When I look back over a 20 year period on my experiences engaging donors about making a bequest, each and every instance has taught me valuable lessons about the psychology of estate planning.

Dr. Russell James, Researcher and Professor at Texas Tech University, has given me valuable insight and successful strategies over the years. Dr. James points out in his presentations and in his book Inside the Mind of the Bequest Donor that often a charity is 40 years away from actually realizing if their approach to a donor was effective.

In fact, I have learned in the past 20 years in fundraising that discussing major giving and setting up bequests for charities are two of the last things people really think about in their daily lives.

Why did my first Leave a Legacy or Planned Giving sessions feel like busts at the time? I would organize sessions in which donors and supporters only showed up for moral support (and to be perfectly clear, none of my family members came out to support me). During these meetings we even provided coffee and continental breakfast in a comfortable setting.

Only years later did I realize these events really were successful. Of the four people who came to one of my first Planned Giving sessions, three have now passed on and one is still living. Of the three that have since passed, I can say that all three left bequests in their estates, with two of the three making donations which are in the top five largest gifts to this organization. During their lifetimes, all three continued to make annual contributions to the organization. Of interest, at the time none of the three had an updated will.

The key to my success with these Leave a Legacy sessions was to reference the research of Dr. James. When approaching a donor, instead of using the planned giving terminology, I invoked a term Dr. James calls “symbolic immortality” when addressing leaving a legacy in estates or tax planning with donors. The discussion then moved from an ask for the charity to a discussion about the donor’s heirs and how they can have a lasting impact in the world.

This technique has been replicated countless times in the past eight years with increased success. More individuals are attending these information sessions and taking estate and philanthropic planning discussions and the completion of their wills to the next stage.

www.giftabulatorusa.com

Your Most Important Assets Are Outside Your Portfolio

You might have been advised that the most crucial elements of wealth creation and preservation centres on your investment portfolio. It doesn’t.

As I see each day in our practice at FUNDING matters the huge financial issues in our lives are the success of our marriages, the ability of our children to live productive and fruitful lives and our commitment and engagement to create wellness by healthy eating, exercising and living.

If any of these lifestyle elements aren’t working smoothly or worse, if they are in a destructive mode then there is generally a heap of money going out the door to fix these problems.

If you are glued to your portfolio without paying much attention to your world outside of your financial statements chances are you are setting yourself up for failure, regardless how your investments perform.

Discuss family matters with your children, update your wills, take care of your affairs. Make a provision for charity to benefit society and in the end benefit by reducing your taxes through your philanthropy. Leave a legacy for your family and society.

Financial Success Element Number Two

Besides marriage as a critically important financial issue, the raising of your children is also financially important since raising productive, independent and resourceful children engenders greater financial success for them and less of a drain of wasted resources for the parents.

When it comes to kids, children who are deprived of their parents time and investment in their earliest years will ultimately need the mentoring time and dollars invested in later years. But those later years often entail a multi-fold investment and commitment (inability to get a job, substance abuse, adult support and upwards).

Yes, raising children is expensive and time consuming, but re-raising them after they have become young adults or full adults is a heck of a lot more expensive and heart wrenching.

Discuss your goals with your children and learn about theirs. Help them to become volunteers and show them how you give to charity. Tell the the good that your charitable giving does for you and how you also benefit financially through the process.

At FUNDING matters Inc. we often see the issues facing families who come to the cross-roads in their planning but realize that they must find ways to assist their children make it over the hurdles emotionally and financially. Illustrations via the GIFTABULATOR help families see how they can afford their lifestyles and support worthy causes.

Number One Element for Keeping Wealth

Marriage is probably the number one element for making and keeping wealth or financial stability.

A spouse can contribute to greater wealth. A spouse can help with business, give/offer ideas and counsel, entertain your clients, shop wisely for home needs and be committed to saving, investing and charitable giving.

A good marriage can also keep away a bunch of financial negatives. You won’t suffer a divorce, which often entails a split of 50% (after legal expenses) of your asset base and prospective income, the introduction of duplicate housing/lifestyle costs and host of other financial inefficiencies.

So like doing a portfolio check up couples should do a review of the health of their relationship. They should review their finances read books on successful investing while also build their knowledge in having successful relationships.

Protecting your wealth is a multi-step process which takes into consideration you and your partners values, views, interests and priorities. It involves gaining a better understanding of how your partners needs and interests fit with yours now and over time.

Discussing charitable giving with your partner is also a great idea for building a legacy but also tax reduction.

At FUNDING matters Inc we have been able to walk families through the timely discussions regarding their future plans and reduce family unrest through our discovery meetings and illustrations of financial planning through the GIFTABULATOR software.

Challenge for Charities: Less than 1% of Boomers have a Charitable Giving Plan

If it isn’t tough enough to raise money for charities, the largest cohort of individuals set to inherit tens of billions of dollars in the coming decades does not have a plan for their charitable giving – can you say opportunity!

Charities should take the time to education these individuals in terms of the importance of planning. Personal financial plans connect with well thought through estate plans and build in charity to make a difference in society and tax reduction.

Take the time to discuss your estate plans with your professional advisors or take in a Leave A Legacy seminar in your community to find out more about how you can prepare for your future needs and plans.