Donor Education – Why Effective Donor Education Programs Are Important

Give sign image, estate planning

Image by Jello Fishy

One of the most effective ways to educate donors and help them achieve financial literacy is through sustained and focused donor education programs. The process of understanding the power of philanthropy and how it works best for a donor’s goals and objectives takes time. When donors learn together, share their ideas and understand what other donors have done and are doing, they become more comfortable with the process.

Donor education programs which focus on philanthropy and related topics, such as financial issues for women, can teach both men and women how to achieve the joy of giving while living. Your institution can incorporate into the donor education event faculty and student presentations which integrate messages into the mission of your institution. These programs can help differentiate/distinguish your institution and create deeper relationships with donors, alumnae, and alumni spouse (Women’s Philanthropy Institute 2009, 15). (8)

Effective donor education, combined with financial literacy, can also provide networking opportunities. Associating with women of similar financial standing increases their willingness to use their money to leave a legacy. This is especially relevant for women who are learning to be comfortable with their wealth. Many baby boomer women in this country will inherit twice—once from their parents and once from their spouse. Nevertheless, donors will not give until they know that they can take care of themselves first. As an estate planning attorney, the most common question I hear from a new widow is, “Do I have enough money to live on?” (Of course that question should be asked many years before that moment in time.) Taking the time to systematically educate your women donors, to help them achieve financial literacy, to teach them that by gifting they can reap both current and future rewards will help empower them to act when they receive their “double inheritance.”

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,

Estate Planning Conundrum: What to do when a beneficiary has a substance abuse problem

Will ImageIn my 28 years of working with families on their estate plans, many parents have raised the issue of what to do when a child or grandchild struggles with substance abuse. With the recent death of Whitney Houston and her connection to substance abuse, it reminds me of what this means during the estate planning process. These parents are heartbroken and need guidance on how to address this difficult situation in their estate planning documents. Substance abuse – whether it’s alcohol, prescription drugs, or illegal narcotics – affects many of the families we advise. As a result, we developed a list of questions for families to consider when designing their estate plan:

  1. Has the beneficiary ever been diagnosed with a mental illness?
  2. Is the beneficiary having a particularly hard time – is divorce on the horizon? Has he lost his business? Does he gamble?
  3. What is his relationship with other family members?
  4. Who does he trust?
  5. Who is giving him money?
  6. Is he eligible for government assistance?
  7. Who is paying his health insurance?
  8. Is he employed? For how long? What types of jobs?
  9. Has he ever been treated for his addiction?
  10. Is he a member of Alcoholics Anonymous or a similar organization?
  11. Do these issues run in the family?
  12. Has there been a family intervention?
  13. Is he open to counseling? Has this topic been addressed?
  14. Where is he living? Can he live alone?

I have noticed that substance abuse often masks other underlying mental health issues, including undiagnosed or untreated schizophrenia, bipolar disorder, and depression. That these issues are often part of a larger family pattern makes having the discussion much more difficult, but much more essential.

Families in Conflict

An addicted child may have already taken a significant emotional, physical, and financial toll on the entire family. Parents who find it difficult to handle this child become increasingly disturbed when they consider who would step in if they are unable or unavailable. This helplessness often leads to anger, frustration, and conflict.

One parent may want to cut off the beneficiary while the other parent cannot consider doing so. One parent may want to kick the child out of the home, while the other parent believes that doing so would make matters worse. These conflicts add stress to their marriage and the family at large.

Grandparents may have different opinions than the parents. Siblings may already be resentful of their addicted sister or brother. In many families, the troubled child has already received significant emotional and financial assistance. His troubles have already taken center stage at the dinner table. His presence in the home and attitude toward the family may have already created constant disruption.

Estate Planning Tools and Options

As complex and emotional as these issues are, families must address them. And they will welcome having an impartial, yet compassionate advisor to provide guidance, suggestions, and choices.

One planning tool for parents to immediately consider is for that child to designate them as the agent under his health care proxy and his attorney in fact under the durable power of attorney. Without these documents, HIPPA will prohibit the parents from being involved with his treatment. Also, these documents give parents legal access to his health and financial records, which could be extremely important if it becomes necessary to apply for government benefits.

Inevitably, an estate planning discussion will include disinheritance. In my experience, this is a subject frequently discussed and rarely implemented. No matter how angry and frustrated they are, parents still want to provide some sort of safety net for their child.

This pressure to disinherit the troubled child may come from the sense that he has already taken more than his fair share of the family’s resources, possibly at the expense of the other, more responsible children. As the family’s advisor, however, you should ask the parents:

  • If you are not here, how will the child be cared for with no existing financial resources?
  • Who will be responsible?
  • Who will he call?
  • Will disinheriting him place a financial burden on your other children, or will they be able to walk away?

Establishing a Trust

Rather than disinheriting him, a common solution is to establish a trust that includes him as a permissible beneficiary – or is only for his benefit during his lifetime. The hard decision, however, is who will serve as trustee after both parents die. Parents are understandably reluctant to place that burden on their other children or on other relatives.

If there are significant assets, then choosing a corporate trustee is the simple choice. The other children or trusted friends or advisors can then have the right to remove or replace that trustee during the trust duration. If there are not sufficient assets to warrant a corporate trustee, then the parents must identify friends or trusted advisors – who should be paid for their services. The trustee should review the trust document to ensure that he has the right to resign from his office, and understand the mechanism for subsequent trustee appointments. The document should provide the trustee with the authority to expend funds for purposes such as counseling, detectives, drug testing, and private security.

Trust Terms and Provisions

After deciding on the line of succession and identifying who will operate the trust, parents need to focus on the various purposes for which the trustee may or may not distribute income and/or principal from the trust to the beneficiary.

If the beneficiary is likely to require government assistance, then the terms of the trust must contemplate that. The trust document may also give the trustee authority to withhold payments if deemed advisable. This is often preferable to asking that trustee to determine whether a beneficiary is drug-free. Those suffering from substance abuse can be clever, and making such a determination is tricky.

Rather than withholding payments, another approach is to provide the beneficiary with incentives for staying clean. The trustee could provide additional distributions if the child holds a full-time job or regularly attends counseling sessions. Making the distribution provisions restrictive and under the trustee’s sole control can help protect those assets from the troubled child’s creditors, or from any of the many “friends” and acquaintances who might take advantage of him if they believe there is money in his pocket.

Many parents have a sense of shame or denial, and may rightly choose not to make these troubles public, or put them in a trust document that others can access. I encourage parents to write an annual side letter to the trustee that describes their observations and offers details that they are reluctant to share while living. This letter could be placed in a sealed envelope, kept with the original estate planning documents, and updated/revised as circumstances change. It can be comforting to the trustee to understand more about the parents’ goals and objectives from their own voice.

Planning for the beneficiary with a substance abuse issue is complex and can have consequences that affect the entire family. Remind parents that life is a movie, not a snapshot. A plan created now should be good enough to handle today’s circumstances, yet flexible enough to contemplate the unknown. Encourage parents who are dealing with this difficult situation to revisit their plan every few years as circumstances change and evolve.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,

Educating the Donor to Make the Most of Charitable Giving

It is also important that donor education courses lead donors to ask the right questions, and that fundraisers are prepared to answer them. “It almost comes with the territory that ‘If I have the money, then I have the knowledge’,” says Cole Wilbur, former president of the Packard Foundation. “Most of the questions in the philanthropic field are questions that people don’t know to ask. They are not obvious.” ( (9)

Wilbur goes on to say, “It should also be noted that in some cases donor education can be harmful if it makePerson holding a hoop in front of a mans so-called ‘strategic giving’ seem too complicated, time consuming and overwhelming. It can make a would-be donor jump through too many hoops to master the craft of giving. Donor educators need to acknowledge up front the vital role that personal passion, deep values, and gut-level instincts play in any good giving. The notion and role of craft should not trump good intentions and natural inspiration. Donors do have the option to add varying degrees of planning, strategy and focus to their giving, but the presentation of those options should not create barriers to taking the initial steps forward.” ( (10-ibid.)

Donors who are passionate and well informed about the organization’s mission are valuable ambassadors in the community. It’s important to determine what donors know and don’t know about an organization by conducting focus groups with donors to find out what they want to know. As Michele Minter points out in CASECURRENTS, April, 2011: “Even when they feel empowered and know how to give efficiently, donors can still find themselves stymied by their lack of subject-specific knowledge. Once donors have identified their philanthropic focus, they face the challenge of sifting through large amounts of information to choose how best to give. With so many nonprofits and media outlets competing for attention, where will a passionate donor find relevant, trustworthy information? “

Here, then, are some key questions for donors to consider when considering making a charitable gift:

Which charities do they want to benefit?

Donors should know the goals, objectives and mission of an organization and if they match their values and giving goals. They should explore the “why” questions of philanthropy based upon their personal history, values, passions, relationship with money, and planned legacy.

What kind of property do they wish to donate?

Do they want to donate money, items, property, stocks, etc? This will affect the type of gift set up and giving process as well as who is involved.

Gifts of significance come in many forms. They may be substantial cash contributions, gifts of appreciated securities, or in-kind gifts such as contributions of valuable art or tangible personal property. Often major gifts are in the form of multiyear pledges given outright or through planned giving vehicles such as bequests, charitable trusts, or gift annuities. Regardless of the form they take, gifts of significance usually come from donors who have contributed several smaller “gifts” over a period of time. (

How important are the income tax effects of the gift?

Depending on the size, the donation will be effected by tax policy which will be applied accordingly.

How important are the gift/estate tax effects of the gift?

This will again depend on the size/type of gift. If a donor makes a planned gift, (CRT, CRUT etc.) it will be affected differently by tax policy and how much the donor gets back from the school regarding their CRT/planned gift policies. For example, a CRUT is the most versatile of planned giving instruments, but it must meet strict IRS code requirements in order to be tax exempt and receive a charitable deduction. (Sargeant, Adrian and Jen Shang, 2010.)

Does the donor want the gift to be in effect during his/her lifetime or at death?

Depending on the type of gift the donor wishes to make, it will kick in either after or before death. For instance, if the donor puts an institution/organization in his/her will (a charitable bequest), it will only be available to the institution/organization after death. But if the donor gives through a CRT or CRUT, he/she will be giving the money upfront and it will be active during his/her lifetime and after death.

Does the donor wish to retain interest in the property gifted and to be involved with where the gift is used?

It is important for donors to be clear about how much money, time, and influence they are prepared to commit to a project, and that they have considered the strategic and personal commitments it will require.

Are the values of this organization aligned with the donor’s?

It is important to give to an organization with which the donor has a connection regarding values. That connection will make the donor willing to give more and participate in the organization if necessary. The donor can also represent the organization to the community to possibly recruit more donors.

Does the organization have an operating strategic plan and is it regularly revisited? Does it have an evaluation plan and methodology that captures real outcomes?

What determine the importance of strategic planning are the small number and the long term, organization-wide impact of the decisions in the strategic plan. It is important that the donors have a clear understanding of the goals and long term strategy of the organization so that they are aware of where their money is going and how it will achieve its objective.

Does the organization possess the financial health and managerial capacity to achieve its objectives?

It is important to be sure that the organization/institution to which donors are giving is able to perform the activities and objectives that it promises to. If the managerial capacity is lacking, or if the organization does not have the proper financial capacity to perform the necessary actions and execute its strategy, then it is a bad investment. It is important to ask for the future strategy and to meet other donors involved with various levels of leadership within the organization.

Does the organization readily make its financial and operating information available?

This information should be available on the organization’s website. Its tax forms should be readily available online to ensure that its practices are transparent and that it is financially reliable and accountable.

Donors need to know the tax status of the organization/institution to which they are giving: In order to be deductible, charitable contributions must be made to qualified organizations. Donors can ask any organization whether it is a qualified organization, or they can check IRS Publication 78, Cumulative List of Organizations. It is available at (,,id=172936,00.html)

It is important that all levels of donors ask these type of questions, and that such questions are addressed at a financial literacy program. “The principles that apply to the wealthy apply also to the less-wealthy because they still have limited resources and limited time,” Tierney says. “The moral of the story is: Don’t wait too long to ask life’s most important questions.” (



Starting in 2007, donors need a receipt for any donation. The old limit of $250 has been eliminated, so even a $10 bill in the collection plate requires a receipt if they want to deduct it. Here are some specific guidelines:

Donors may deduct up to 50% of their adjusted gross income in one year for charitable donations. (Certain contributions, though, may have lower limits.)

If they give more than 50%, they can carry the excess forward for up to five years.

If they donate goods to an organization, it must be in good condition or better in order to be deductible; and if it’s worth more than $500, they have to get a professional appraisal to prove its value.

If they receive something in return for their donation, they can only deduct the excess of their donation over what they received, i.e., if they paid $100 for a charity dinner with a value of $30, they can only deduct $70.



Patricia Annino
is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,

Effective Risk Planning

Image of a womanOn the topic of risk I just came across the Family Office Exchange white paper, “Securing the Future: Managing Threats and Opportunities Through Effective Risk Planning” (October 2009) and was impressed with how thorough this study is.

I recommend it to anyone who is advising high net worth families and/or family owned businesses. Its intent is to develop a process for managing risk to diffuse reactive, irrational decision making and puts forth the best strategies for managing downside risks while emphasizing the importance of capitalizing on new opportunities for wealth enhancement.

It is a wonderful roadmap for a proactive approach for risk management across the critical issues that families face. To quote Arie de Geus, the former head of strategic planning for Royal/Dutch/Shell, “nobody can predict the future, therefore one should not try. The only relevant discussions about the future are those where we succeed in shifting the question from “whether something will happen” to the question “ What will we do if it does happen?”

For more information about the Family Office Exchange white paper visit:

My three key areas “at risk” for family business are family cohesiveness, business ownership and wealth management. Here’s a look at what they mean:


Family Cohesiveness

In the area of family cohesiveness, reputation or the family brand is at risk. Traditionally this risk was triggered by a scandal that leaked out to the press. The new way this risk is triggered is through the Internet. Videos on YouTube and comments on Facebook, Twitter and other social media networks can affect your client’s family’s reputation. They can be used in divorce litigations, custody matters and employment decisions. Once viral, it is hard to remove.

The younger generation, if not educated, is not mature enough to understand the afterlife omnipresent power of the digital era. A family risk-management policy should include education about the dangers of social media and a morally binding decision among family members to understand the consequence of social media on the reputation of the entire family.

Business Ownership

Another risk to family cohesiveness is the impact to individual goals and life plans.

Traditional risks included the illness, death or incapacity of a key family figure.

In the family business, the new risk is the increased work lifespan of the older generation, which results in the delayed succession of the middle generation. With the older generation in good health and working longer, the individual goals plans of the middle generation may be passed over.

Intentional strategic planning and clear communication among all generations as to what the expectations are for the working lifespan and when the baton should/will pass can mitigate this new risk.

Traditional risks to business ownership and the economic sustainability of the family enterprise include the death or the divorce of a shareholder when proper planning is not put in place.

The new risk is the evolution of laws governing how assets are allocated in a divorce. In some states, gifted and inherited assets are divisible in a divorce. This does not just include what the about-to-be divorcing family member owns when married; it also includes the expectancy of what that divorcing family member will receive in the future.

Those expectancies are taken into account when determining the allocation of assets between the couple about to be divorced.

A significant side effect to this is how a hostile soon-to-be ex and their attorney will value the family business assets and put that valuation into the public realm of divorce court. The goal of that hostile divorcing member is to value that business high. That valuation may do serious damage to the estate plan of the older generation.

There is also an increased risk for the allocation of alimony. Many family businesses have phantom income that is earned during the course of the marriage that shows up on the tax return and is plowed back into the family business. At issue is how that phantom income should be treated for alimony purposes.

If it was earned during the marriage, is it marital income taken into account for alimony and child support purposes even though not actually received?

When thinking about these risks, it is important to remember that the law and the court in the jurisdiction of the divorcing spouse that will control these decisions. These risks can be mitigated by a well negotiated pre-nuptial agreement or post-nuptial agreement.

Wealth Management

Traditional risks related to a family’s wealth (including financial, intellectual and social assets) include the illness or death of the key family stakeholder, economic downturn and changes in the regulatory or legal environment.

The dissipation of wealth sometimes triggers new risks. With each ensuing generation, wealth is splintered. Besides that, new risks also come from the lack of creation of new wealth during turbulent economic times, the increased complexity of legal and tax matters and the increased complexity of wealth management choices.

These risks can be mitigated when the family coordinates its advisers and monitors the integration of all professional services.

The risks are further mitigated when the family embraces and encourages financial education and financial literacy across the generations. Mentoring, shadowing, exposure to the concepts and resources along the generation continuums reduces unintended consequences.

Risk taking is an essential part of getting ahead. Be sure and invest in yourself and understand and evaluate your risks before you take them.

Patricia Annino
is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,

Is it Reasonable to Expect Alimony for Your Eggs?

human eggsA previous New York Times article had an op-ed piece by Sarah Elizabeth Richards, author of “Motherhood Rescheduled: The New Frontier of Egg Freezing and the Women Who Tried It”.

In that op-ed piece Ms. Richards discusses the case of a 38 year old woman who is asking her soon to be ex-husband of 8 years to pay $20,000 to cover the cost of her egg freezing procedure, medication costs and several years of egg storage on the grounds that when they got married they started with the expectation they would start a family and now she may not have that chance much longer.

The couple had been unsuccessful in fertility treatments and as part of her legal case she is arguing that since fertility treatments were part of the marriage, they should be considered part of the marital lifestyle, which should be maintained as long as possible post-divorce.

The lawyer representing the woman is quoted in the article as saying that he hopes the case settles out of court. Should this go to court it would be a case of first impression in the country and we will all be watching what happens.



Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

Putting a Price on a Human Egg

Lawsuit claims price guidelines used by fertility clinics artificially suppress the amount women can get for their eggs. Current demand means egg donors can typically make between $5,000-$10,000 for their efforts. What process do they go through to donate?

By Ashby Jones

human egg image, healthcare and legal issues for parentsHow much is a human egg worth? The question is at the heart of a federal lawsuit brought by two women who provided eggs to couples struggling with infertility.

The women claim the price guidelines adopted by fertility clinics nationwide have artificially suppressed the amount they can get for their eggs, in violation of federal antitrust laws.

The industry groups behind the price guidance—which discourages payments above $10,000 per egg-donation cycle—say caps are needed to prevent coercion and exploitation in the egg-donation process.

But the plaintiffs say the guidelines amount to an illegal conspiracy to set prices in violation of antitrust laws. The conspiracy, they argue in court papers, has deprived women nationwide a free market in which to sell their eggs, and enabled fertility clinics to “reap anticompetitive profits for themselves.”

“It’s naked, illegal price-fixing,” said Michael McLellan, a lawyer for the women.

The lawsuit, filed in the Northern District of California, could go to trial next year. In February, Chief Magistrate Judge Joseph Spero allowed the suit, first filed in 2011, to move forward on behalf of women who have donated eggs in recent years. Later this summer, Judge Spero will consider whether to broaden the case to include women who plan to donate eggs in the future and want to eliminate the caps entirely. If successful, it could upend the industry of egg donation, which has increasingly become an important option for women who have trouble conceiving because of advanced age or other problems.

The technology behind donated human eggs dates to the late 1980s. The fee hovered around $2,000 until the late 1990s, when demand went up and clinics began paying more, said Rene Almeling, a sociology professor at Yale University and author of a 2011 book on the business of egg and sperm donation.

The market for sperm donation, which has also ballooned in popularity in recent years, works differently than that for egg donation. Sperm donors generally contract with a sperm bank to give weekly samples for a year, for which they are paid about $100 each. There are no price caps on sperm donations, which are sold for between $400 and $700 per vial.

Sperm banks generally don’t charge a premium for sperm from men with particularly desirable characteristics of looks or intelligence. Such screening is often done by sperm banks, said Ms. Almeling, by requiring donors to either be enrolled in a four-year college or have a college degree, and to be taller than around 5 feet 8 inches. “Short doesn’t sell,” she said.

Rising prices for donated eggs prompted concern within the American Society for Reproductive Medicine, a nonprofit medical-specialty group focused on reproductive medicine and a defendant in the lawsuit. In 2000, the organization, made up largely of doctors who pay to join, suggested that payments should not go above $5,000 without justification, and said that payments greater than $10,000 went “beyond what is appropriate.”

The price guidelines aren’t mandates. But more than 90% of the nation’s clinics belong to the society, which has adopted the guidelines.

Fertility clinics generally charge patients $12,000 to $20,000 for each donor-egg cycle, a weekslong process, which, with the help of hormones, can yield more eggs than the one or two normally released by a woman each month. About half of each payment goes to the donor. Whether a donor makes $5,000 or $10,000 or something in between depends on, for example, whether the woman has donated successfully before, and whether a clinic thinks her profile will suit the needs of an infertile couple.

Location also matters. Payments in urban areas with high demand tend to fall between $8,000 and $10,000.

More than 9,500 babies were born from embryos created with donor eggs in 2013, the latest annual figure, according to the Society for Assisted Reproductive Technology—a nonprofit organization of doctors and others who practice in assisted reproductive technologies and the other defendant in the suit.

A spokesman for both defendant organizations declined to comment, as did representatives from several fertility clinics. But many fertility clinics clearly state in promotional material that they adhere to the guidelines.

The organizations have claimed in court papers that the purpose of the pricing guidelines isn’t to enrich fertility clinics or doctors. Rather, they say, the aim is to lessen the chance that outsize payments will entice women to donate and either hide health risks that might disqualify them or ignore the possible side effects of donating.

The problem is finding a payment amount that fairly compensates women for their time and effort, but isn’t seen as too hard to pass up by college students or low-income women. The $5,000 price recommendation “might be enough to coerce some women into donating, while for others it wouldn’t be nearly enough,” said Ms. Almeling.

Leah Campbell, a 32-year-old writer in Anchorage, Alaska, suffered complications following two donor-egg cycles while in her 20s and said she became infertile as a result. Ms. Campbell, who saw fliers around her college campus promising thousands of dollars to egg donors, said she worries about the effects of unlimited compensation. “The money entices women to take on risks that they probably wouldn’t otherwise,” she said.

Ms. Campbell said she preferred the policy in other countries, including the U.K. and Australia, which don’t allow payments for eggs. “If you want to donate for altruistic reasons, go for it,” she said. “Otherwise, let’s leave the money alone.” The price caps strike others as unnecessary, even sexist. “It’s overriding a woman’s ability to choose what she wants to do, even if it’s risky,” said Julie Shapiro, a law professor at Seattle University and author of a blog on law and reproductive technologies. “We don’t ban people from cleaning nuclear waste sites because it carries some risk, we allow them to charge more to make up for it.”

Other egg donors say a robust market depends on compensation. “I helped couples achieve their dreams, and in return they helped me go to law school, buy an apartment, pursue my dreams when I was in my 20s,” said Gina-Marie Madow, a four-time egg donor now working as a lawyer at Circle Egg Donation, a Boston-based egg-donation agency. Ms. Madow said $10,000 “feels like the right amount for women to get” for a cycle but didn’t understand the reason behind the price cap. “I just don’t think the [organizations have] done a good job explaining why it exists,” she said.

The price caps might also guard against worries that women might pay more for eggs from mothers of certain ethnic or racial backgrounds, or with such traits as physical beauty or high intelligence. Such a market exists, largely through a small number of agencies that cater to couples willing to pay a premium.

“It’s a concern about eugenics, that women will pay more for eggs from an Ivy League grad,” said John Robertson, a professor of law and bioethics at the University of Texas.

Kimberly Krawiec, a law professor at Duke University who has studied the egg-donor industry, played down such concerns, adding that mothers-to-be generally aren’t looking to build a genetically superior child. Ms. Krawiec said she had little issue with couples paying more for eggs from women with, say, high SAT scores. “Fertile people have been screening for beauty and intelligence for years and years,” she said. “It’s called dating.”

Source: Ashby Jones at


Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

Avoid these common mistakes when preparing a federal estate tax return

Attention to detail will keep your clients from paying more taxes than they should.

keyword image, estate taxes, estate planning, tax returnsAs a CPA, you may be asked to prepare or review the federal estate tax return, Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. This form, which is due nine months after a client’s death, provides a snapshot of the assets included in the decedent’s taxable estate. The assets are valued as of the date of the client’s death and this value (for most assets) restarts the income tax basis for the assets included in the decedent’s gross estate. However, unlike on the income tax return, the client’s estate planning documents and how the assets are titled may determine how certain assets are characterized and whether certain elections should be made. Therefore, in my experience, it’s best if you and your client’s estate planning attorney both work on preparing Form 706, especially if it’s not a form that you prepare regularly. That way, you can work together to avoid costly errors such as the following:

  1. Missing the filing deadline. The estate tax return must be filed nine months after the date of death. Not doing so can jeopardize elections and cause interest and penalties to be due. If it will not be possible or practical to file the return on time, then you should file Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes in a timely fashion. Keep in mind, however, that while filing Form 4768 provides an automatic six-month extension to file Form 706, it does not automatically extend the time allotted to pay the tax. If your client needs more time to pay, you must request an extension to do so (on Part III of Form 4768), but it’s up to the IRS whether to grant the extension.

  3. Not electing portability on the federal estate tax return of the first spouse to die. Sec. 2010(c) allows any unused federal estate tax exemption to be “portable” and therefore available to be used at the surviving spouse’s death—but only if the portability election is made on the federal estate tax return of the first spouse to die. Even if you do not think the surviving spouse will need to use the exemption, elect portability anyway, because his or her financial circumstances may change.

  5. Not including prior gift tax returns with the federal estate tax return. If you’re not a client’s first adviser, be sure to check whether his or her previous adviser prepared and filed any gift tax returns for him or her. Clients sometimes do not remember these details, so, after a client dies, have the named fiduciary write to the IRS Service Center and request copies of any prior gift tax returns. This is an important step to take, as prior gift tax returns will affect the amount of available estate and generation-skipping tax exemptions, which, in turn, affect the amount of any tax due on the federal estate tax return.

  7. Not including a tax allocation clause in a will and trust. Every will and trust should incorporate what is known as a tax allocation clause that allocates the taxes among the beneficiaries or against the residue of the estate. If there is no such clause in the document, then the law of the state in which the client is domiciled controls the allocation, and tax may be allocated to assets that would otherwise qualify for the marital or charitable deductions.

  9. Not providing adequate documentation for the assets that are valued on the return. Assets such as real estate, tangible personal property, and the interests in any closely held businesses can be hard to value. When adequate documentation is not obtained, the risk of an audit dramatically increases. Should taxes be assessed, penalties may also apply. Have appraisals (not opinions of value) made that show the fair market value at the date of death for these assets, and submit them with the tax return. These appraisals should be thorough and show comparable sales. If a discount from value is taken on the return, the appraisal should explain why that discount is the right one. The discount should also be a specific figure and not a range.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

Financial stress is hurting worker productivity

By Beth Healy

Half said they were not certain they could come up with $1,000 in an emergency.

The recession ended nearly six years ago. The stock market has doubled in value since then. But Americans are still money roll image, financial stress, financial informationso stressed out about money and finances it’s even affecting their productivity at work.

A study by State Street Global Advisors in Boston found that large numbers of workers are experiencing emotional or physical stress that’s related to dealing with their personal finances. About 61 percent of 1,000 workers surveyed across all ages and incomes said they were moderately to severely stressed about their finances.

Half said they were not certain they could come up with $1,000 in an emergency.

“The data’s really powerful around how distracted employees are,’’ said Megan Yost, a vice president at State Street Global who works on retirement plans. “They’re not just at work and distracted; people are actually taking days off and missing work to deal with financial stress.”

Stagnant wages and competing demands on workers’ wallets — from mortgages and day care to student loans and saving for retirement — are often to blame. If the employee gym was the 1990s answer to employers fretting over rising health care costs, “financial wellness” is today’s buzzword in human resources offices.

Graph image, financial stress, financial informationIn December, State Street Global held a brainstorming session with executives from a dozen Fortune 500 companies, plus some academics, to talk about the issue. At a daylong session in Manhattan, they represented a variety of industries and employees, from the highly compensated to those in manufacturing jobs or driving trucks.

Barbara Kontje of American Express Co. was among those attending the session. She’s director of Retirement Americas & Smart Saving for 21,000 employees at the New York-based financial services company. Even in her industry, she said, concerns about finances abound.

‘There are just very few people who aren’t thinking about money.’


“Money is always top of mind’’ when she talks to employees, Kontje said. “They want to do better with their money. They know they should be saving for retirement. They know they should have an emergency fund. They just don’t know where to start.”

Even the federal government is on to the problem. In a report in August, the Consumer Financial Protection Bureau said many Americans lie awake at night wondering how to make ends meet. The agency cited an Aon Hewitt study that found 81 percent of workers felt financial worries hurt their work productivity.

In 2012, the government said, one in five workers admitted to skipping work to deal with a financial issue.

Financial stress is worst at lower income levels, according to State Street, but it doesn’t stop there. Among those earning less than $75,000 a year, two of every three people reported being stressed. For those earning more than $75,000, it was a bit more than half.

Beyond income, stress levels are largely determined by how much money people have available in cash or investments. Those with less than $50,000 in savings and investments suffer the most, according to the State Street study, with more three-quarters saying they experience money stress.

The situation doesn’t improve dramatically until workers accumulate more than $150,000 in investable assets, State Street found. Still, 42 percent of people in that group reported feeling stressed.

At higher levels of pay, the problem becomes more about spending habits than earning power, State Street’s Yost said. But nearly half of the people between the ages of 29 and 69 who took part in the survey said they were living paycheck to paycheck.

Rosario Cabrera, a personal care assistant from New Bedford, knows that all too well. She is 31 years old with two kids, working seven days a week caring for people who are sick and homebound, earning $13.38 an hour.

“I struggle every day,’’ Cabrera said. Having just paid the rent and her bills, she said, she’s got $89 left in her bank account. “That’s going to have to hold me until next week,’’ she said.

Even with the improved economy, workers’ financial worries are painfully common.

Another recent survey, commissioned by the Boston communications firm Brodeur Partners, found that people think about money more than about sex. While most workers think about their families and their spouses most, they worry about money 69 percent of the time — more than about religion, work, or their sex and love lives.

“There are just very few people who aren’t thinking about money,’’ said Andrea Coville, chief executive of Brodeur. “That’s a lens you have to understand when you’re talking to people.”

That’s an issue for employers trying to encourage workers to save for retirement, executives said. It’s why State Street Global, a giant investment manager that caters to corporate retirement plans, pension funds, and other large institutional investors, is spending time and money in the weeds of workers’ financial angst.

This era’s corporate gym comes in the form of company-sponsored sessions on mortgages and investing, one-on-ones with financial advisers, and webinars. Kontje said Amex has cut some of its online financial education programs to 30 minutes or even 15 minutes, to make them more convenient for workers to watch off-hours.

The most money-stressed age group is 30 to 39, according to the State Street study, the age range when many people marry, have babies, and save for other major expenses.

“It’s clearly a demographic that needs the help and wants the help,” Yost said.

Source: The Boston Globe Beth Healy


Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

Can Another State Tax Your Trust?

You could owe a state tax simply because a fiduciary or beneficiary was located there.

By Amy Feldman

Smartly setting up trusts requires knowledge of state tax laws, not just federal rules. Consider Robert L. McNeil, a couple of an image with an attacking cash register, non grantor trustchemist and onetime Pennsylvania resident who amassed a fortune as the business brain behind Tylenol. McNeil established trusts for his family but chose to locate them in Delaware, for tax purposes.

When Pennsylvania sent the trusts a tax bill of more than $500,000, the chemist’s family fought back. In May 2013, the Pennsylvania Commonwealth Court ruled that, despite McNeil’s residency in Pennsylvania at the time of the trusts’ creation, there was insufficient connection to the state for it to impose its income tax.

Score one for wealthy families who set up trusts in no-tax states like Delaware and South Dakota, then fight against another state’s tax grab. Fighting back isn’t easy. Pennsylvania has one set of rules and California has another, while New York — wising up to some of the complex tax-avoidance techniques used by wealthy families — changed its rules last year to crack down on certain maneuvers. “Each state has its own little unique twists and turns,” says Heather Flanagan, a senior wealth planner at PNC Wealth Management. “It’s kind of a hodgepodge right now. It would be nice to have some uniform law.”

Start by knowing that there are two types of trusts for tax purposes, grantor and nongrantor. With a grantor trust, all of the trust’s income-tax items (gains, losses, deductions, and credits) pass through to the person who set up the trust. With a nongrantor trust, the accumulated income in the trust is taxed at the trust level. The highest federal income-tax rate for trusts is 39.6% (plus the 3.8% Medicare surtax) on trust income above $12,300 for tax year 2015; state tax rates can reach double digits in places like California and New York. Beneficiaries, meanwhile, owe income tax on the distributions they receive from a trust, subject to complex calculations on what constitutes income.

IF YOUR TRUST HAS INCOME that’s sourced from another state — a rental property located there, say — you’ll generally owe tax to that state. But for a state to tax all of a trust’s undistributed income, it needs to have a substantial connection, called a “nexus,” to that state. The rules are all over the map: Your trust could be considered a resident of a state simply because the person who set it up was a resident there, or because the trustee, fiduciary, or beneficiary lived there.

You could, in fact, owe state income tax in several locales. In one infamous case, California levied a tax on a beneficiary of a Missouri trust when he received a final distribution, even though the trust had been paying Missouri state taxes during the previous years. PNC’s Flanagan points to a client who lived in Maryland and was paying taxes on a Delaware trust in several states, and wanted to decant the trust, or move the assets in it to another trust, to lower state taxes (see “How to Bust a Trust,” Penta, March 4, 2013). “We were not comfortable with their stance, so they went to another trustee,” she says.

While you may be able to get a tax credit in one state for state tax paid to another, the overlapping rules are so complex it’s not always clear how to claim one. Double taxation can happen, says Ronald Finkelstein, a tax partner at Marcum, a national advisory firm. Such issues regularly crop up in California, where there are many traps. If a New York family set up a directed trust in Delaware, then named a financially sophisticated friend in California to oversee the trust’s portfolio or to make distributions, it could face a tax hit in California.

What’s a person to do? Some wealthy families will pre-emptively move — or switch trustees — to avoid such problems. In one such case, a Californian who had sold a building-materials business for hundreds of millions of dollars, relocated out-of-state in advance to avoid the hefty state-tax hit. No surprise: Going into internal exile for tax reasons has become “a highly contentious issue in California,” says Matthew Brady of Wells Fargo Private Bank.

A client of Finkelstein’s switched from a grantor to a nongrantor trust and dropped a trustee who would have established a connection with a Midwestern state that could have staked a claim. Hundreds of millions of dollars of stock were in the trust, with a cost basis of zero for tax purposes, explaining why we were asked not to identify the players.

This, in short, is a high-stakes game of cat-and-mouse, pitting rich families wanting to hang on to their assets against states desperate for revenue. New York’s new rules crack down on a complicated planning technique known as an Incomplete Non-Grantor Trust; the strategy is to essentially straddle the rules of grantor and nongrantor trusts to cut state income taxes for residents of high-tax states. States, of course, are on to the technique. “New York is the most aggressive on doing this,” says PNC’s Flanagan. “Other states may follow.”

The game is ongoing.

Source: www.barrons.comIllustration: Dan Picasso for Barron’s E-mail:


Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,

A Generous (and Unwanted) Gift

people in bed image, estate planning tipsBy MICHAEL BAHLER

My father has always been generous with his money. I didn’t have to pay for college or law school or even for the confused year I spent at Princeton taking graduate courses in sociology.

When my mother was sick, I moved back from Washington to be near her and help with her care. While there, I tried to start a legal-research business, for which my father paid the start-up costs and then the winding-down expenses. Most of the money in my children’s college funds is from him.

He would cover random needs, too, like sending me home after a visit with new boxer shorts, dress socks and Allen Edmonds loafers (size 11½, even though I am a 12). He had bought these things for himself but wanted me to have them and wouldn’t take no for an answer.

“He’s like his mother,” my mother said, smiling. “Except instead of trying to get you to eat food, he gives you underwear.”

As a successful cardiologist, my father can afford to be generous. He never invested in stocks, but he earned a lot and lived a frugal life. Besides buying laptop computers and a Volvo station wagon every seven years, the man buys almost nothing. He doesn’t take vacations or go to Atlantic City.

My sister recently treated him to dinner at a nice restaurant. When I asked him how it was, he said: “Good. But Burger King is just as good.”

After my mother died, my father told me he was giving me his house.

This offer was different, and not just because a house is obviously a big gift.

My father had not slept in my parents’ bedroom since my mother died, choosing a couch in the family room where she spent her final weeks in a rented hospital bed.

In the months since her death, he had not cleaned out any of her things, not even the wig she wore to chemotherapy.

It seemed he was desperate to leave the house to escape the reminders of my mother, but he couldn’t bring himself to sell it because there was too much history.

My two sisters already had houses they were happy with. The only way he was going to get to leave was if I agreed to take it. But my father couldn’t tell me why he really wanted to leave the house, so he made it seem as if he were doing it all for me.

“Your two boys need a house,” he said. “They need a backyard. Your wife wants a house.”

My wife, Jen, had been wanting to move out of our apartment and into a house, and she appraised my parents’ home objectively. It was in a good neighborhood on a quiet street. The backyard was big and level, so our boys could run loose and she wouldn’t have to trek to a playground.

The house was small; my parents had bought it right after my father finished his residency, when they had little money. With few windows and stained wood paneling, it was also dark and out of date. But Jen said if we didn’t have a mortgage we could take our savings and remodel.

To me, it was the house I grew up in and the place where my cancer-riddled mother had just died. And while I may be wearing my father’s boxers, I wasn’t going to move back into his house. I kept telling him no.

“You’re making a mistake,” he would say in a singsong voice.

“So be it,” I would singsong back.

In earlier times it was common for people to stay in the house in which they were raised. But these days leaving home permanently is the goal, and to move back feels like the ultimate failure.

Plus, I had been a high-school misfit with few friends and I still avoided restaurants and other public places in my hometown for fear of bumping into former classmates. I couldn’t see moving to a place where I would have to go into hiding.

And if I took the house I knew I would never be able to sell it because I couldn’t even bring myself to throw out scrap paper with my mother’s handwriting on it.

In February, I called my father to tell him my youngest son had said his first word.

“You’re missing out on a great house,” he said.

“Don’t you want to know the word?”

“It’s got dual-zone heating and air-conditioning. Andersen windows. Solid oak doors and cabinets.” My father had installed the doors and cabinets himself.

When I was a child, my parents were always looking for a better house, and on weekends they’d drag us along to see all these pricey homes. I would fight with my sisters in the back seat and then complain I was bored as we toured each house. If I had known I was looking for a home for my future wife and children, I would have paid much more attention.

“The dishwasher’s still great after 40 years,” my father said.

“No,” I told him.

In May, I called to wish him a happy birthday.

“You know, your son would do much better in this house,” he said.

My eldest was having serious kidney issues at the time.

“It’s all the dust in your apartment,” my father said. “The air is horrible there. You need to bring him to this house. It’s like the country here. You’re harming your son by staying at that apartment.”

My father was a doctor, so I couldn’t totally dismiss his opinion. To be safe, I mentioned his dust theory to my son’s New York nephrologist, who shook her head and looked at me as if I were bonkers.

In July, I asked my father when we were having Mom’s unveiling.

“She’s still in the house, Michael. I can feel her here. She’ll look after you. She’ll look after your family.”

“You think I want to move to a house where Mom died?” I said. “You think that doesn’t affect me also?”

“You could always knock down the house and build something you like,” he said.

“So Mom’s still in the house, but you want me to knock it down?”

“Think about it financially.”

I didn’t want to think about it financially.

“You wouldn’t have to take out a mortgage.”

I put thoughts about not having a mortgage out of my head.

“Why don’t you move to the house,” he said, “and if you don’t like it after a year, sell it and find someplace you like?”

“You’d really let me sell it?”

“It would be your house. That would be up to you.”

I felt as if I was being conned, but it would be a great financial move. Plus, who was to say my father wouldn’t remarry and leave everything to his new wife? The house might be my only chance at an inheritance.

“No, Dad, I can’t do it.”


“Don’t you want more for me than to live in that house? Why would you want me to live there?” I was on the verge of tears.

“It’s a great house.”

Over the next year, he kept pushing. I’d be seduced by the positives and then unnerved by the negatives.

Finally he told me he had already given me the house and showed me a property tax bill with both our names on it. Without telling me, he had gone to a lawyer and made us joint owners.

“That doesn’t mean I have to take it,” I told him.

He kept on me until my views began to shift. Maybe he had just worn me down, but the numbers suddenly seemed better, and I stopped thinking about the negatives. Jen and I decided to take the house and we moved in.

In our apartment, I slept on the right side of the bed and Jen slept on the left. But it felt weird to be in my parents’ bedroom sleeping on what was my father’s side of the bed, even though it wasn’t his bed; he had taken that to his new house three blocks away.

I begged Jen to let me switch sides and she agreed. I thought it would be better until I realized I was sleeping on my mother’s side, and that felt equally weird.

“Can we switch back?” I asked.

She moaned and I crossed over her.

I stayed there for a while and then inched toward the middle, where I had sometimes slept as a child when my parents let me come in after I had a nightmare.

I woke the next morning splayed across the bed, feeling anxious and unsettled. But then the sunlight beamed at me through the blinds, and I heard my two boys frolicking in the hallway, happily oblivious to history.

Time to put on a pair of my father’s boxers and start my new life.

Michael Bahler, a writer, lives in New Jersey.

Source: The New York Times

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at To download Annino’s FREE eBook, Estate Planning 101 visit,