GIVING WHILE LIVING
Neal A. Deutsch, CFP®
Published in Rivertown Journal, April 2008
Congratulations- you did your estate planning! You executed and signed your
will, durable power of attorney, living will and healthcare proxy, perhaps
some trusts- great job! You thought about it thoroughly- how to save estate
taxation, gift taxes, income taxes, and get the most to the kids with the least
amount of shrinkage due to Uncle Sam. Whew…it’s done. But is it
what you really want?
I am a big believer in quality of life before money. Living well is the best
revenge. The theory of the parent keeping full control of the purse strings
until death is slowly unraveling to a new paradigm – “We want
to see them enjoy the money while we are alive, not wait until we’re
gone!”
More and more in our office we see case after case where the parents are giving
to children and charities during their lifetime to enjoy seeing how their wealth
can help to improve the lives of others. According to a Today/Gallup Poll in
2007, 22 percent of Americans have received a “large gift of money” from
relatives who were still alive. 48 percent used the gift for a home down payment,
14 percent to buy a car, and 11 percent put it toward college education. The
Foundation Center of New York reports that currently there are over 63,000
independent foundations, a 77 percent increase in the past decade. Where is
all the money coming from? Parents and folks just like us, who have decided
to use their money to make a difference in the lives of others, and live to
see it.
So let’s be clear here…I am not suggesting in any way that you
should give it all away and live a life of poverty. What I am suggesting is
that you look at your standard of living, and decide if there is any part of
your wealth that may be utilized to make the lives of others better. You may
start a gifting program for your children to give them an “allowance” monthly-
just because they are grown up doesn’t mean they don’t need it.
Fund an endowment program for your old high school or college- it can be done
for as little as a few hundred dollars a year. What about doing something for
your church or temple…new books, furnish a classroom, or plant some
shrubs in the front of the building?
Philanthropy produces a feeling in oneself that is impossible for one person
to describe to another adequately- you need to feel it for yourself. It’s
a natural high that I suggest everybody try. If you are unsure how to begin,
consult your financial planner or accountant for guidance. Remember- if you are
willing to give, everybody will be willing to accept, so give carefully. If it
is a family member, weigh carefully to whom and how much. If you are interested
in a charitable contribution, research the charity to make sure they are qualified
and trustworthy, and ask how your money will be utilized. How about starting
your own Family Foundation with your own board of directors made up of family
members to decide how the foundation funds are disbursed? The possibilities are
endless…but the great feeling lives on and on!
Neal A. Deutsch is a Certified Financial Planner™, Registered
Securities Principal and President of Chestnut Investment Group in Suffern,
NY, helping people with financial planning since 1984. Please feel free to
call Neal at 845.369.0016 or email him with your questions at neald@chestnutinvestment.com
Feel free to visit his website at www.chestnutinvestment.com
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