The Planned Giving Blogger

The art and science of planned giving.

Barriers to bequest giving.

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That’s the title of an interesting article in the May/June 2010, issue of Advancing Philanthropy, the magazine of the AFP.  The author, Russell James, describes an AFP-sponsored study of donors who reported committing to a charitable bequest.  After the death of the respondent, family members were contacted to determine how the estate had actually been divided.  The results were surprising.

Of the people who had indicated that they had made a charitable provision in their will, 59% produced no charitable transfer at death.  There were some obvious reasons:  people changed their minds, for example, but the authors theorize an important reason for the discrepancy. . . the prevalence of assets being passed on through “transfer on death” or “pay on death” designations and thus outside the probate process, undoing the donor’s plans.

What to do?

1.  Trusts solve the problem since all assets are titled to the trust but many people don’t want to go to the expense or trouble to create a trust.

2.  Use your marketing to remind donors that assets can be transferred to your organization via a transfer or payable on death provision, essentially moving your gift outside probate.

3.  Educate donors about rephrasing percentage bequests to be “a dollar amount equal to ___percent of my adjusted gross estate for federal estate tax purposes.”  If the language is “___% of my estate” that usually means a percent of the probate estate, which will likely be lower.

Phyllis

P.S.  Here’s the full article, Barriers to Bequest Giving.

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Written by Phyllis Freedman

May 24, 2010 at 11:47 pm

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