A billion dollars goes a long way.
Ruth Gottesman, a former professor at the Albert Einstein College of Medicine and Chair of the Einstein Board of Trustees, has been working for and associated with the college for over 55 years. A passionate believer in the importance of education, Ruth worked throughout her career helping tens of thousands of children be diagnosed with learning problems through developed screening, evaluation, and treatments that she worked to develop.
Earlier this year, she donated $1 billion to the medical college. As a result of this donation, the school is going tuition-free, and will ensure that no student will have to pay tuition ever again.
Ruth has been a building a legacy as a philanthropist with her late husband for almost 60 years. David Gottesman, a key early investor in Berkshire Hathaway Inc. and founder of the well-respected First Manhattan Co., built much of their wealth through a very successful career in Wall Street. The couple has been managing their donations through The Gottesman Fund, which was started in 1965.
For generations, Ruth and David will be remembered for the generosity and dedication they have given to those who are working to help the world.
If it wasn’t before, their legacy is now truly concrete.
How Can You Leave a Legacy Without $1 Billion?
Obviously, not everybody has a spare billion laying around to donate. However, even if you have considerably less wealth, you can still leave a lasting legacy to be remembered by.
Here are a few ways you can incorporate charitable gifting into your estate plan:
Donate a portion of your estate to nonprofit organizations or charities. This could include cash, investments, your house, or other personal property. Talk to your estate planning attorney about which charities or organizations you’d like to include as beneficiaries in your will or trust (and be extra careful to get their name exactly right, as there are a lot of charitable organizations with similar-sounding names out there).
List your favorite nonprofits as beneficiaries on IRAs or 401(k) accounts. Not only does a strategy like this offer potential tax benefits (retirement accounts may be heavily taxed if left to someone other than your spouse), but it also maximizes your donation, since nonprofit organizations typically don’t need to pay taxes on retirement plans they receive as gifts.
Name a charity as a “Transfer on Death” or “Paid on Death” beneficiary on your bank account. This can help bypass probate, and avoid filing fees assessed by the courts. Just be mindful that rules about “transfer on death” beneficiaries change from state to state, so it’s best to consult with a qualified attorney prior to updating the beneficiary designations on your accounts.
Set up a donor-advised fund. A donor-advised fund is an investment account set up specifically for the purpose of gifting to charity. With this type of account, you would make donations and receive a tax write-off in the year of your donation. When you pass, you can allocate a portion of your estate to go to this fund. One benefit of a donor-advised fund is that you can change which organizations you want to donate to with your financial institution, rather than having to update your estate plan. Talk to your financial advisor about whether this strategy makes sense for you.
An additional consideration for charitable gifting includes thinking in percentages, rather than in dollar values. Since the value of your assets and required minimum distributions on retirement accounts may change over time, it makes sense to specify the percentage of your estate that should go to your named beneficiaries, rather than a set dollar amount.
And, most importantly, remember that leaving a legacy doesn’t have to require a monetary transaction at all. Volunteer, teach, mentor, and lead by example! People will remember you fondly for the work you did during your life, and your name will forever be associated with the impact you’ve made on your local community.
Contact Caress Law
If you have any questions about philanthropy, and leaving behind a legacy that will make a difference in your community, don’t hesitate to reach out to the experienced estate planning attorneys at Caress Law. We’re here to help you leave a legacy. Give us a call at (503) 292-8990 or fill out the form below to get started.
