Planned giving articles

Philanthropy Journal has a special report devoted to planned giving.  It seems to have a lot of good information.

Still…I just don’t get planned giving. I guess it’s my own limited view of the world. I have the feeling it’s all about people who are in a whole different income class from me and anybody I know.

My dad had a city pension, a home he owned and a little nest egg. He
got Alzheimer’s; my mother had a stroke and spent 5 years in a nursing
home. By the time it was over everything they had was gone. Now my wife
and I are seeing the same thing with her family. Her dad saved a nice little pile of cash, has a nice piece of property in
a Northern California town he bought a long time ago, and good union
medical coverage. They were doing pretty well until last Christmas when
my mother-in-law fell and broke her hip. After the
hip-replacement surgery she went to a nursing home and has been in a
nice board-and-care for a few weeks ($110/day and that’s cheap because it’s in a rurual area). Last weekend she fell again and
broke her femur. It’s happened so fast we haven’t even been able to
figure out how much it’s cost so far, but it’s big. My wife looks at
their assets only as a pool to get them care for the rest of their
lives. We expect it to be gone.

The gurus of planned
giving point to a study that says that $41 trillion bucks will transfer
hands in the next 50 years. I’ve always been skeptical of that figure.
I’d also like to see the distribution of that money. I suspect that the
lion’s share of it is in the assets of a pretty small population. I’m
sure there are people who are wealthy enough to withstand any medical
situation and still have an estate. I just don’t know any of them, and
I don’t think they’d fall into the category "middle class." I think
most middle class families will consider themselves lucky if they get
to the end of life without passing on debt instead of wealth. If
family history is any indicator, my wife will outlive me by a long time. We
don’t expect to have two thin dimes to rub together in the end. And there’s
a report out just today that says that the nation’s Medicare system is in much worse shape than Social Security. It says:

…the trustees emphasized, as they did last year, that Medicare’s
financial outlook was "much worse than Social Security’s" and predicted
that the monthly Medicare premiums paid by almost all Americans 65 and
older would rise by 12 percent next year after a 17 percent increase
this year.

just saying that when I hear "planned giving" I think it applies to
somebody else, not me. If I were in planned giving I’d sure take a look
at the demographics of the baby boom and the projected health care
costs for that cohort. More than that, I’d get to know the carriage trade.

No comments

  1. Plan givers do not have to be so different from you. Take a couple thatare 55 and have no children. Then want to give big to the ACS but they can not afford it.

    The buy a gift annuity that does not pay out for 10 years. They get a tax deduction now, the payout doubles in the 10 year wait, then pays them in retirement. When they die the residue goes to the ACS.

    Other examples abound.

    You know people who have planned gifts. I have 4. Two pools and two annuities.

  2. I guess I’m not very optimistic about having an uncommitted “residue.”

  3. Another question. What’s “residue”? If I take out an annuity gor giving purposes and accumulate several thousand dollars, can I liquidate all of it for my own care or to pass on to my heirs if I want to? Or do I sign a commitment to give it to the charity? Is residue what’s left over after I use all I need, or is it a fixed commitment?

  4. You take out a fixed amount that is set by the earning power and age of the annuitant. When you die, if at the average age of death, the residue is what is figured that is left. It goes to the ACS. Generally a large % of the original corpus is left. You can not touch it during your life time.

  5. Thanks.

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