ICG Dollars & Sense

Dollars and Sense

John A. Johns writes us about a planned giving opportunity for retired faculty. John is Director of Development at California State University, Los Angeles.

He says the faculty would greatly benefit from estate planning. They have appreciated assets from which they need to shelter capital gain taxes. But there are two emotional load box.

First, talking with them about their planning involves having them think about their mortality. How do you phrase the question to them about a will or a planned gift?

Secondly, because they were solid members of the middle class who bought land in Southern California thirty or forty years ago, they still think of themselves as “poor teachers” when in fact they are millionaires because of their appreciated assets. How do you get them to realize this or at least not thinking the “wolf” is at the door?

These are superb questions. They not only affect Development Directors who work with faculty members. The same conditions exist among many of your donors. We asked Bill Sturtevant to respond to the questions. He is the national master planned giving statesman. Here’s what he tells us.

Answer: Your first question deals with the sensitivity of mortality is not always easy when you speak with prospective planned giving donors. I have discovered over the years there is not as much sensitivity as you might think. Many of my donors have quite nicely come to grips with the issue. Still, I try to use soft phrases such as the following:

A plan for the distribution of your assets after you have departed.
What would you like done with your property when you are no longer with us.
A will that reflects what you ultimately want done with your property.

Their second question pertains to donors who do not think of themselves as wealthy. This occurs particularly among those who slowly grew their wealth through hard work or compound interest. It also affects those who suffer economic reversal or a depression. There are a few possible approaches.

One is to point out the careful estate and charitable planning is particularly important for those of us (notice my language) who have worked hard to build an estate, as we cannot afford to be wasteful in our approach.

Another option is to illustrate the tax depletion even on a “modest” estate and point out this can be avoided. I also observe that avoiding such depletion is particularly important for those of us who have worked hard to build an estate (observe a pattern?!).

Finally, having a current estate donor bear witness can be very powerful in these cases. The idea is for a peer to say something like: ‘It is important for people in our circumstances to plan carefully for family, charities, and so forth. I discovered I could not afford waste or depletion. The planning process has been very beneficial for me because I know now that family and charities are taken care of in a way which reflects my wishes. I recommend this process to you.’ -Jerry Panas