The new year brings a new estate tax exemption that has increased from $11.18 million to $11.4 million. Does this mean only clients with estates larger than $11.4 million need consider a charitable bequest? Absolutely not!
Eighty percent of the U.S. population donates to charity annually, but less than 6 percent leave a bequest. Why? Studies suggests that clients are more likely to leave a gift when presented with an option.
Dr. Russell James, JD, PhD, CFP, the leading authority on the psychological mindset of donors, suggests, “the bequest decision-making process can accurately be conceived of as the process of completing the final chapter of one’s visualized autobiography.” Therefore, rather than focusing first on tax strategies, maximizing inheritance and other complex strategies, it helps to understand the clients’ values before developing a plan.
His research shows when individuals reflect on the causes they are passionate toward, they find comfort in knowing their gift may advance or sustain the causes and missions dear to them. He suggests using the following language when discussing beneficiaries: “Many of our clients wish to leave a gift to causes that have been important to them - are there any causes you have been passionate about?” By framing the question around a 'cause' rather than a specific charity and using the term ‘gift’ instead of ‘bequest,' 15.8 percent of those in Dr. James’ study elected to leave a gift. When charitable bequests weren’t presented as an option, only 4.9 percent asked to include charity as part of their estate plan. The size and value of the estate doesn’t seem to be a major factor.
Generally, people would like to feel as though they have some sort of legacy and have contributed something to society. A charitable gift can provide that assurance. And
you
may be the person who brings it all into perspective.
Of course, we are only a phone call away and happy to assist you and your clients with a
Legacy Fund
to carry out those charitable wishes. If you have clients interested in leaving a gift for charity in their will, we offer
sample bequest language.
If you have questions, feel free to
contact me
at 405/606-2914.
