Written by: Aruna Pappu, LLM-Tax, J.D., MSTax, Director of Development, Gift Planning, Drexel University
As this unprecedented COVID-19 crisis continues, more and more Americans are facing uncertain futures. In the past few months, an interesting trend has been evolving from this uncertainty: Attorneys across the country are being besieged by clients requesting new Wills and Estate Planning Documents. COVID-19, it appears, has been a resounding wake-up call to many who have avoided facing these important personal and family decisions in the past. As Mary Kate D’Sousa, a veteran estate lawyer and co-founder of Gentreo observed, “[A]s awful as the pandemic is, at least it will enable people to take action they need to protect their families and loved ones….This has moved from the ‘to-do-list’ to ‘I really have to get that done.”
So who are these folks now clamouring for their Wills to be done? Attorneys are reporting that these new clients represent all ages and segments of society, rich and poor, old and relatively young. It appears that what’s happening in lawyers’ offices now reflects the “Best Practices” promulgated in the industry for years: Namely that Wills and Estate Planning Documents are beneficial to all individuals, regardless of financial standing or age. Now more than ever, Americans across the board are poised to draft/update their Wills, Powers of Attorney, Healthcare Surrogates, Living Wills and End of Life Directives.
My fellow PGCGPers, by now you should be hearing the not-so-faint strains of harps and the pot o’ gold image should be coming into sharp focus. As more and more Americans are updating their Wills and planning documents, they will inevitably also be making decisions about their Charitable Giving. Our Prospective Donors are primed to GIVE NOW, so this is a HUGE opportunity for us.
The obvious question at this point is “HOW?” HOW do we undertake meaningful discussions with our Prospects during these socially distant times and still manage to move the Gifting process forward? Although the “Best Practices” for this aspect of our profession are new and continually evolving, it is widely recommended that Charitable Gift Planners make the following modifications to their Gifting strategies:
- Delay IN-PERSON meetings with older Donors. Instead, use tools such as Zoom meetings, FaceTime calls, etc. to schedule VIRTUAL Visits with older Donors. This is a useful method to remain in contact with Prospects and an effective way to keep the Gift Planning discussion active during these times of socially distancing;
- Remind Donors about the benefits of CGAs. Take this opportunity to assure Donors that their annual CGA income will NOT be affected by Market volatility;
- Educate Donors about the SECURE Act. Educate Donors about the SECURE Act’s new rules regarding Retirement Accounts and Qualified Charitable Distributions (QCDs), also known as Charitable IRA Rollovers. Clarify that the SECURE Act affects Donors who own IRAs, 401(k)s or any Qualified Retirement Plan. Further, the demise of the “Stretch IRA” will likely motivate Donors with large IRAs to Gift a larger percentage, or possibly all, to charity;
- Encourage Donors to consider other deferred Gifts. For example, discuss the benefits of Gifts from Wills, Trusts, Life Insurance or Payment/Transfer on Death designations – since these do not require a current transfer of assets, Donors may find them more appealing;
- DISCOURAGE Gifts of DEPRECIATED Capital Assets. Explain to Donors that, under the current Market downturn, depreciated capital assets such as securities or real estate, should not be donated. Encourage Donors to Gift cash instead.
With the aid of available technology, these recommendations seek to help us “pivot” to more “Virtual” interactions with our prospective Donors – at least for the foreseeable future. Remember my friends, we’re all in this together. So let’s all do our best to use this “Silver Lining” to Planned Giving’s advantage!