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, http://www.patriciaannino.com.

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, http://www.patriciaannino.com.

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.” (http://www.hewlett.org/uploads/files/PhilanthropysForgottenResource.pdf) (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.” (http://www.hewlett.org/uploads/files/PhilanthropysForgottenResource.pdf) (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. http://www.hewlett.org/uploads/files/PhilanthropysForgottenResource.pdf

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. (http://www.philanthropy.iupui.edu/TheFundRaisingSchool/PrecourseReadings/precourse_giftsofsignificancehodge.aspx)

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. http://philanthropy.com/article/Questions-Big-Donors-Should/126789/

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 www.IRS.gov. (http://www.irs.gov/newsroom/article/0,,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.” (http://fundraisingwins.wordpress.com/2011/03/28/questions-donors-need-to-ask-themselves/)

 

Receipts

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.

Source: http://www.consumerismcommentary.com/3-things-you-need-to-know-before-giving-to-charity/

 


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, http://www.patriciaannino.com.

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: https://www.familyoffice.com/knowledge-center/securing-future-managing-threats-and-opportunities-through-effective-risk-planning

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, http://www.patriciaannino.com.

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.

Source: http://www.nytimes.com/2013/09/07/opinion/alimony-for-your-eggs.html?_r=0

 

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 Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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: www.WSJ.com Ashby Jones at ashby.jones@wsj.com
http://www.wsj.com/articles/putting-a-price-on-a-human-egg-1437952456

 

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 Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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.”

“Mistake.”

“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 www.nytimes.com

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 Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Family Business Magazine Reviews “It’s More Than Money – Protect Your Legacy”

Its More Than Money CoverI am pleased to announce that the January/February issue of Family Business Magazine (http://familybusinessmagazine.com/) includes a wonderful review of my latest book, “It’s More Than Money – Protect Your Legacy”.

Written by Barbara Spector, it indicates, “The book also presents advice on risk mitigation, including strategies for protecting the family’s reputation on social media, questions to consider when deciding whether to make gifts to heirs, and the advantages of prenuptial agreements. In addition, the book offers information on achieving philanthropic goals.”

She really got the essence of exactly why I wrote the book. Click here to read the entire review!

A Goal of Hard Work Created The Family’s Estate

Home and money image, estate planningAn Italian immigrant I know came to this country at a very young age with a grade school education and aspirations of a better life for himself and his family. Those aspirations brought him to work with what he knew – real estate. To him, land meant wealth that could never be taken away. He did not need a college education to develop real estate. He knew with good tenants there would be good cash flow. His immediate goal was survival coupled with those America stands for (land of the free, home of the brave and a place where hard work can bring tangible, financial rewards).

He started his family in a traditional marriage and raised hardworking children. (It is interesting to note he never viewed a good college education as a key value for his family; he valued hard work. It was fine if his children were educated, but that was not a goal). His initial goals were a strong family and wealth through hard work and entrepreneurism in real estate.

As time and life went on, his net worth increased and the course became tougher and the goals increased. He instinctively followed the message of IBM founder, Tom Watson who said, “I’m no genius, but I’m smart in spots, and I stay around those spots.” He stuck to his mission and did not enter into new lines of businesses for three decades. As he became successful, he bought more real estate and more real estate and more real estate. He involved his children in the real estate business at very young ages – discussing it with their parents at the dinner table, piling into the car after dinner and driving through the small city looking at what was for sale, how each piece was valued, where the trends were, what was successful, what was not successful. If the father saw a property that he thought was a “catch”, he would call the owner and make an offer – whether or not the property was formally for sale. His now adult son told me that the habit of driving around for a few hours every night is still ingrained in him, and no matter where he and his family travel, they still do an ongoing analysis of the real estate.

The patriarch reached the point where he owned most of the town and employed many of the citizens in construction and real estate management. To him their families were as important as his own. He valued hard work and loyalty, helping his workers out in difficult personal times or illness.

His goal of coming from Italy to America to raise a family and achieve success was surpassed in the first ten years; yet he never stopped raising the bar, achieving new goals and setting new standards. He remained on the cutting edge of real estate development and his goal grew into revitalizing and shaping the city in which he lived. He wanted its people employed, and he wanted the city to be a magnet for those from other towns to come and shop and dine. His business broadened from acquiring apartment houses and office buildings to starting restaurants and stores.

His children and grandchildren (and most of their spouses) are all employed at some level in the family enterprise since, in addition to his entrepreneurial aspirations, a central value was a tight knit family with a sense of safety. His goal became to use the enterprise he’d built as a safety net for his family, his employees and his community – yet to continue to instill hard work. No one individual (including his family members) would ever become independently wealthy from the enterprise. It is held in a dynasty trust and will continue to support his goals long past his time on this earth.

Although he did not set off with a specific end goal in mind, he knew his compass was set to true north. He used that as a guide and kept course through the obstacles life threw him. His business and family were sustained because of his focus and persistence on his chosen direction. His story is one that shows that although it may be important to know what your long-term goals are – write them down and adjust them and you go – the goals that emanate from true north are instinctual. With focus and perseverance they endure. I am confident every member of his family and his extended family understands that his values are what they have accomplished and what matter to 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 her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

What You Need to Know Before Donating Art

By Daniel Grant

Your Name on a Plaque Is Nice, but It Might Cost You More Than You Think

For investors thinking about donating art, the most important thing to know is this: It isn’t as simple as…donating scales image, appraised valueart.

The benefits of a donation are clear. The owners may have a fondness for a particular museum or university they have in mind as a recipient, for instance. And the ego gratification is powerful.

“There’s a legacy involved,” says Ralph Lerner, founder of Art World Advisors, which helps collectors determine what to do with their art. “You get your name on a plaque on the wall. You can take your grandchildren to the museum to show them the plaque.”

But ego aside, donors have a lot of factors to consider before making a decision. Among them: Selling may bring them far more money than they can save with a tax break for their donation. If they donate, the tax break varies depending on who the donation goes to and what the recipient does with it. And the recipient may have very different ideas from the donor’s about how the art will be displayed.

Running the Numbers

First, investors need to be aware of the difference, for their finances, between selling and donating. Peter Jason Riley, a certified public accountant in Newburyport, Mass., ran the numbers for a hypothetical U.S. taxpayer with an adjusted gross income of $500,000 who owns a painting appraised at $100,000 that she had purchased for $20,000.

What happens if she donates the painting? For donations of art, owners generally can claim a federal tax deduction of up to 30% of their adjusted gross income each year, making the limit in this case $150,000. So donating the painting to a qualifying museum would permit this owner a deduction in the current tax year of $100,000, assuming she hasn’t made other art donations totaling more than $50,000. (If donations in a given year exceed the limit for deductions, the overage can be deducted in following years, up to five if necessary, with the 30% limit applying each year.)

That means the tax benefit this year for the donor in this case would be $41,118, according to Mr. Riley.

If the painting was sold for the appraised value of $100,000, assuming a typical 15% sales commission to an auction house or art gallery, the seller would owe $31,372 in capital-gains tax, resulting in a net profit of $53,628, Mr. Riley says.

So the owner would end up $12,510 better off by selling than by donating. That doesn’t take into account the cost of an appraisal—typically $1,000 to $3,000—which isn’t always necessary for a sale but would be required in this case before the artwork was donated. The Internal Revenue Service requires an appraisal for donations of property over $20,000.

Selling won’t always be better financially. For one thing, selling might net far less than the appraised value of a piece of art. But this is an exercise owners should work through to get a sense of what they might be sacrificing by donating.

How Much of a Deduction?

Art owners also should be aware that their tax break for a donation will depend on several factors. In some cases, donors can claim a tax deduction based on the appraised value of the art. But in others the deduction is based on the price the donor paid for the art, which can be much lower than the appraised value.

One factor: The donor’s deduction can only be based on the appraised value of the art if the recipient qualifies as a public tax-exempt organization. If the recipient is a private tax-exempt organization, the deduction is based on the price the donor paid.

A public tax-exempt organization is one that receives at least one-third of its support from the general public; museums, universities and other schools, hospitals and churches are among the institutions that generally qualify. A private tax-exempt organization doesn’t rely on funding from the public. The Ford Foundation is one prominent example, and there are many private foundations funded by wealthy individuals.

But that’s not the only distinction the IRS makes. A deduction can’t be based on the appraised value of the art unless the donation is related to the recipient’s mission. Few recipients except museums are likely to pass that test. For donations to recipients that fail that test, the deduction is based on what the donor paid for the art.

Donations that clear both those hurdles face another one. If the recipient sells the art within three years, the amount deductible by the donor reverts to the purchase price instead of the appraised value—potentially leaving the donor with a bill for back taxes.

One other tax-related issue for those who deduct the appraised value of a donation: The IRS subjects appraisals to review by its Art Advisory Panel, which is composed of art dealers and museum curators. And the panel often makes substantial adjustments to appraisals.

Taxpayers may be subject to substantial penalties if the IRS finds that the donated items are significantly overvalued, so it’s imperative that the appraiser has a legitimate basis for arriving at a valuation, such as comparable sales.

Donation Negotiations

Finally, it isn’t only the IRS that can take some of the fun out of a donation. Recipients can be prickly about how the art will be displayed—or even if it will be at all.

In this case, though, donors have some leverage. Art experts encourage donors to negotiate the terms for their gifts before turning over the art. For instance, the donor might demand that the art be on display for at least three months every three years—or on permanent display.

Or in the case of multiple works being donated, owners might demand that the art be given a special exhibition and be written up in a catalog, and that the pieces must be kept together and none of them can be sold. A donor can also demand perks like free lifetime membership at the highest level for family members.

If a potential recipient balks at a donor’s terms, the owner can look for a more pliable recipient. But donors who have their hearts set on the most prominent institutions as recipients should expect less flexibility.

“I encourage people to donate to universities and smaller museums,” says Susan Brundage, director of appraisal services at the Art Dealers Association of America. “They are thrilled to get something that might be seen as minor by the Met or the Modern or the Whitney. Those larger museums will only put most donations in their basements, never to see the light of day.”

And no plaque for the grandchildren to see.

Source: WSJ.com – Mr. Grant is a writer living in Amherst, Mass. He can be reached at reports@wsj.com.

 

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 Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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