What Will Your Legacy Be?

May 27, 1999

© 1999 by Michael C. Gray


San Jose attorney John Hopkins recently gave a wonderful presentation to the Northern California Planned Giving Council about how to establish a family legacy of giving to the community.

Although accumulating wealth is worthwhile for the security of financial independence, we can get real personal satisfaction by giving to worthwhile causes in which we are personally interested, and by passing to our children and grandchildren our personal values of charitable giving.

One approach to getting the process going is to have family meetings where family members are invited to suggest charities to which donations may be made by the parents. Children and grandchildren should also be encouraged to give modest amounts to causes in which they have an interest.

Instead of giving small donations of $25 here and there, the family can have more impact by giving larger donations to fewer charities, and can "make it real" by personally delivering the check to the charity and taking the time to see in person what the charity is doing.

As part of the estate plan, the parents could leave part of their estate to a community foundation in a fund that can be directed by their family members. Alternatively, if the estate is large enough, the family could establish a family private foundation, as Bill Gates, David and Lucille Packard, and other wealthy families have done. Children could also be invited to suggest a charity to receive part of what would otherwise be their inheritance.

Some ideal assets to consider leaving to a charity include retirement accounts (401(k), profit sharing, IRAs) and tax-deferred annuities. These funds will mostly be eaten up by income taxes and estate taxes, so why not direct them to a charity of your choice?

Perhaps you could consider the community to be one of your children who should receive a part of your estate.

The value of a family charitable legacy process is to enrich your family relationships through giving.

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Michael Gray, CPA
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