Planned Giving and Family Wealth Preservation

Planned Giving and Family Wealth Preservation

An often overlooked benefit connected with planned giving is that a charitable gift annuity or charitable trust can be used to preserve family wealth. According to research by experienced estate planning attorneys, 60% of adult children from wealthy families had depleted their inheritance during their lives (and some depleted their inheritance within a few years).1 These children had depleted their family wealth because of reckless spending, failed businesses, poor investment decisions, divorce, and creditors.2 The statistics are likely worse for middle-class children who do not have access to advisors.

In addition to bringing children into a discussion concerning the importance of continuing philanthropy, planned giving can go a long way to shelter and preserve family wealth for the next generation. The general approach is to fund a life-income agreement during life or through the donor's estate that will provide secure family income and then benefit the charity after the life of the child or children. Below are some different ways planned giving can be used to preserve family wealth and benefit both child and charity:

  • Charitable gift annuity

  • Joint charitable gift annuity

  • Deferred gift annuity for retirement

  • Charitable remainder trust

  • Family charitable remainder trust (up to 8 lives or term variation)

  • Retirement charitable remainder trust

  • Charitable lead trust

  • These gifts provide the parent(s) with a tax deduction. These gifts can also be funded with estate assets through a will or living trust and will provide an estate tax deduction.

If you would like to speak with our office about a possible planned gift to benefit both your family and Eisenhower Medical Center, please call 760-773-2967.

  1. Beating the Midas Curse, Cochell, Perry and Zeeb, Rodney, Heritage Institute Press, First Edition (November 9, 2005).

  2. Ibid.

scriptsknown