I mentioned I was able to participate in a meeting with about a dozen fairly high-end charitable givers. Our host at the meeting told us about a giving strategy that he and his family have begun pursuing in the last few years, a strategy that can “pay back” in tax deductions as much as or even more than whatever you gave.

I thought it was well worth mentioning this strategy just in case you find yourself in a position to make donations of, say, a hundred thousand dollars or more and you’re not yet at the point where you are giving 50% of your AGI (Adjusted Gross Income) to charity.

This strategy could multiply your ability to give. Read the rest of this entry »

I’ve talked about this often enough in the past. (See the “Related posts” list at the end of this one!) But it bears repeating . . . especially if and when it can be said briefly. And I think this is the briefest way I have ever said these things.

What follows is from an interview I did five and a half years ago with the newsletter editor of one of the non-profits we support. I quote his questions and my answers: Read the rest of this entry »

In my last post, I talked about giving your children the vast majority of their inheritance “early”–while they’re still in their 20s and early 30s, say–rather than later.

A few weeks ago, I was talking with a friend who has many years’ experience counseling and coaching wealthy individuals . . . as a wealthy person himself and a friend, not as a professional counselor. He made an interesting observation about a reason why you want to predefine for your heirs–and make sure they know–how much you intend to leave them: You want to remove every potential reason they may have (every potential conflict-of-interest) that may lead them to think that, by reducing cost of the care you receive toward the end of your life, they will benefit.

“I have seen it,” he said, “where the children say, ‘Y’know, if we put Mom in the _____ Village, we will be spending [i.e., they will be digging into Mom's nest-egg!] to the tune of an extra $50,000 a year compared to _____ Nursing Home. Why should we waste our money?’ “

Of course, they are not “wasting” money if the quality of service is significantly different (which it was in this particular case). And they weren’t about to “waste” or “spend” their money. It was Mom‘s money they were talking about. But they were already anticipating it as their own. And so they withheld from their mother what should have been rightfully hers . . . if only she and her husband had done advanced planning that predefined for the children exactly what they could expect and demonstrated that there was no reason for the kids to modify their care plans in hopes of gaining advantages for themselves.

I read an article this morning that reminded me: Most estate- and legacy-planning professionals ignore philanthropic considerations in their basic planning strategies.

Alexis Martin Neely, for example, notes, in an article printed in the latest Bottom Line Personal, that single adult parents (widowed or divorced, in particular) need to make allowances in their estate plans not only for their personal health care, but also “for the guardianship of any minor children and transfers [of] assets to heirs of your choice while minimizing taxes.”

It struck me: This is the standard mantra of traditional estate planning professionals. For them, estate planning is all about minimizing taxes and maximizing flow-through to the next generation. And it has absolutely nothing to do with larger life purposes, the legacies Read the rest of this entry »

Is your house big enough? Do you need more room? Will your family be happier in a bigger home?

I think my perspective on this issue was shaped a bit last week by a conversation I had with a few members of an American family that has lived and worked most of the time over the last nine years in the foothills of the Himalayas. Read the rest of this entry »

I mentioned that profits have to do with increased wealth; and increased wealth is not the same as cash. If we fail to understand those differences, we can run into some serious trouble.

I thought I would illustrate what I am talking about. Read the rest of this entry »

What are profits?

I don’t think most of us really understand the concept very well. In fact, I’ll include myself in the number who struggle to understand what profits are.

To illustrate: When you hear that a company made, say, $8 billion last year, what image comes to your mind? –For me, I tend to think: “Oh, wow! They have $8 billion in cash in a bank somewhere–$8 billion that they did not have the year before.” “Profits” mean “cash.”

That’s what many people think. But that’s not right.

I’m sure there are more technically correct definitions of the word profits, but here’s a the best working definition I’ve been able to come up with: Profits are any increase in assets for which a business does not have increased liabilities (or debts) other than to the owners. Put another way, profits are an increase in wealth–and (most important to understand–and something I still tend to forget!) wealth comes in many forms other than money!

I say this because, for the longest time, I thought of profits in the same way I thought of a paycheck: profits are the same thing as a paycheck. You take them, bring them to the bank, and buy stuff with them.

But that’s not the case. Read the rest of this entry »

Last August I wrote a brief outline of what one might want to include in a Gifting Criteria Statement.

As I was picking through a pile of papers on my desk on Saturday, I came across the actual document our family has at the moment. I thought you might find it interesting and, possibly, useful–at least as a discussion-starting model for your family’s statement: Read the rest of this entry »