Does It Take a Village to Raise a Planned Gift?

Perhaps not, but often the completion of a planned gift does necessitate teamwork. Larger commitments (six figures and higher for most givers) trigger income tax, estate planning, retirement income and insurance consequences. The donor often contemplates a planned gift in response to the challenge of “wanting to do more” but “not sure if I (or we) have the resources.”

While most lifetime planned gifts can be described as exchanging assets for income, asset selection and implications to future income taxes arising from the tax deduction and income stream returning to the donor make the process complex. Even exclusively testamentary commitments merit study of their impact on family members.

Over the next several posts, I will examine the role of the players most likely to be involved, including the lawyer and tax accountant as well as investment and insurance counsel.

While many planned giving professionals often have close and trusted relationships with their supporters, there comes the moment in the finalizing of “the largest gift of a lifetime” when the involvement of others is needed. The outstanding development professionals understand, either intuitively or through hard-earned experience, that meeting the goals of the donor is most important. And they should welcome “outsiders” to the development process!

A donor contemplating that largest gift of a lifetime seeks a second opinion to reassure them that the form of the gift makes sense and that it will not be disrupting prior estate plans. The size of the gift relative to the resources of the donor is often the best driver of how many professionals need to be assembled. A lifetime gift of $1 million from a centimillionaire probably will not occasion a lot of planning. That same gift of $1 million from a decamillionaire will. The donor also will be sensitive to the fees being incurred, which may limit how much “teamwork” and communication among the professionals is feasible.

By Professor Chris Woehrle, Chair & Professor of Tax & Estate Planning Department, College for Financial Planning, Centennial, Colorado
 

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