Several people attend a zoom conference call, their faces arrayed in thumbnails around the screen.
Joel Carlton-Gysan:
Good afternoon and welcome to today's webinar from Brandeis University's Sachar Legacy Society and Lawyers Alumni Network entitled, Generation to Generation L'dor V'dor: Strengthening Family and Family Giving Through Shared Values. We're glad that you can join us. My name is Joel Carlton-Gysan and I'm Brandeis' Executive Director for Planned Giving. My objective in both my role at Brandeis and with today's webinar is to help educate you and others on how to meet your financial and philanthropic goals throughout your lifetime.
This is our first of hopefully many webinars between the Sachar Legacy Society and the Lawyers Alumni Network. Let me explain a little bit about these groups. The Sachar Legacy Society is a special group of more than 1900 alumni and friends who are strengthening the future of the university by including Brandeis in their state plans or establishing a life income gift. The Brandeis Lawyers Alumni Network welcomes Brandeisians working in the legal profession to connect with fellow alumni lawyers through panels, mixers, and other events across the country and online.
We are glad to host this event today for the larger Brandeis community. Before we start, I'd like to share a few administrative items throughout the webinar. You are invited to submit questions by typing them into the chat box in the webinar dashboard. Your questions will be sent directly to us and will only be viewable by us. At the end of the webinar, we will answer as many of your questions as possible. We are recording the webinar and it'll be available online soon. We will send a link to you as well as a handout on some of the vehicles that might be discussed today. You can also reach out to me at PlannedGiving@Brandeis.edu with any questions about what you want to hear on the webinar. We hope you'll hear information that can help you and add to your education.
This webinar is intended solely for the information of our attendees. The views and opinions expressed do not state or reflect those of Brandeis University and are not attended to serve as legal of advice. Brandeis recommends that you consult an attorney for advice regarding your particular situation.
Okay, now that the disclaimer has been read, let me introduce our panelists. Leslie Effron Levin is special counsel to the firm Cuddy & Feder, and serves as Vice Chair of the Trust Estates and Elder Law Group. She practices in estate planning, elder law, probate, charitable planning, and specialties planning, among many other areas. She graduated from Brandeis in 1994, and is a director on a Brandeis' Alumni Association board.
Dmitry Isenberg is a senior financial advisor with Merrill Lynch and graduated from Brandeis with a BA in economics in 1997 and received his MBA from Boston University. Dmitry is Brandeis University's alumni president in the central Connecticut chapter. For the last 25 years, he has been working in the financial services industry and his advisory practice at Merrill is built around integrated wealth management with a focus on financial planning, investment management, and family giving.
And finally, David Chused has served at Brandeis University as a lead advisor with respect to all development related matters since 2018, where he works with donors and senior Brandeis officials with all phases of complex gifts. Before coming to Brandeis, David served for 14 years as legal counsel at MIT's office of General Counsel and worked for almost 20 years before that in private practice with major law firms in both New York City and Boston, where his practice focused on estates and trusts and public and private charities.
Wow. I have to say that if you were looking for a panel without much knowledge and experience, you come to the wrong place today. So thank you for joining us and thank you Leslie, Dmitry and David for sharing your knowledge today. Let me just jump into some questions right now, and the first one I want to give to David. So David, when you and I were first discussing this idea for the webinar, you brought up the idea of L'dor v'dor. Can you please tell us about that?
David Chused:
Sure, happy to. And in fact, this is a perfect time of year given that the Thanksgiving holiday is just a week away. L'dor v'dor literally translated means from generation to generation, and it's generally about the notion of passing down customs and knowledge and values and beliefs and so forth to our next generation and the generations after that, to make certain that there is some continuity to our families and so forth, and to create and maintain a collective memory for an entire family through the generation. And an important part of that, of course, is philanthropy as a core belief and a core value. And that is what we're here doing today, talking about the way that we can pass that philanthropic belief and value on down to our future generation.
Joel Carlton-Gysan:
Thank you, David. Thank you. And Leslie, when we were talking about generation to generation l'dor v'dor, you brought up the concept of ethical wills as a possible way of sharing this. Can you tell me a little bit about ethical wills and how you raise this possibility with your clients?
Leslie Effron Levin:
Sure. So an ethical will is different than a regular will. So a regular will is a document that people draft and it states what they want to have happen to their assets when they die, who should get them, I leave it to my spouse, to my kids, to Uncle Bob, to Brandeis University. Wherever it's going to go, they appoint an executor who's going to be in charge of gathering the assets and paying the bills, maybe guardians for their kids, maybe they set up trusts. All of that stuff happens in an actual will.
But an ethical will is a document that is created oftentimes, just by the client without the attorneys getting involved that talks about values. It's a way of saying, these are the important ethical values and concepts that I live my life by. My dad has a saying, he says, "In the absence of a mensch, be a mensch." So that's my dad's core ethical value.
And so some people will write down these kinds of sayings and remind their families about it. They will also let them know about the charities that are important to them, "I always give to Brandeis every year, and I'd like you to continue to do so after I'm gone" or "I'd like you, just like I give to Brandeis every year, I'd like you to give to a cause that's meaningful to you, that's passionate to you." And this concept of the ethical will really dates back, its biblical. It goes all the way back to Genesis and it talks about with Abraham and God telling them to, where Abraham talked to his children and saying that they should keep God's way doing charity and justice, and then that concept just sort of takes off from there. So it's an offshoot of that. And over the years it's been used for other things too, but really it's a way for a family just to let their kids know what's important to them.
Joel Carlton-Gysan:
And what are some of the questions that people need to think about when they're looking at this ethical will, Leslie?
Leslie Effron Levin:
I think having conversations, and I talk with all of my clients about charity and about philanthropic giving. And I find a lot of my clients are surprised and they come into it with a preconceived notion that philanthropic giving is for people with lots of zeros at the end of their balance sheet. And you have to leave a million dollars somewhere or half a million dollars or $5 million, all these really big numbers in order to make a charitable gift as part of their estate plan. And I love to throw that whole notion out the window and say, no, no, no, this is your opportunity that if you give, I'm going to keep picking on Brandeis, that if you give $18 to Brandeis every year, that this is important to you, you want to remember them and you just give a token high gift to Brandeis every year, that this is your last shot to do it.
And that in your will, you can say, one last hurrah, I'm going to give $18 to Brandeis. And you could do that and Brandeis would say, thank you, very appreciative, and you just turned on the lights in one of the classrooms. And the problem is that a lot of times families will do this and they'll write their gifts and their checks every December to all the charities that are important to them. And they never tell their kids about what they're doing and what causes are important to them. And sometimes families know and some families do talk about it, but I find many of them don't. And so what I like to do is as part of this conversation is to say, you should talk to your children and let them know what's important to you and what causes are important to you. And so that way they can continue that on in your name afterwards.
But by putting it in your will, it's also right there for them to see, "Oh, hey, look, mom and dad gave to Brandeis. I didn't realize that after they graduated, they still gave every year, and this must've really been important to them." So by having it either in the document or by talking about it, it gives the family an opportunity to continue to do those things.
So I'm going to pick on my dad again. He was very connected to his alma mater, which was Purdue University. He used to take us out there, we'd go to football games and basketball games and go to Hillel and all these things and very passionate about it and go to the School of Material Science. And so my sister and I, we give a gift every year to Purdue, to Hillel, in his name and his honor and to his School of Material Science because we know, because he took the time to take us and to share with us what was important to him.
So we're not giving big bucks, but we do something just to say, we value you as our father. We know this is important to you and we want to continue doing something. It's certainly not at the level that he does, but it's just something. And so by talking to clients, that's how they know what's important to you. If you don't have the conversations, they don't know what's important to you. And so getting families talking is so crucial to all aspects of estate planning, not just the philanthropic piece of it, but the ethical piece, the health, what are my health wishes? Pull the plug, don't pull the plug, all those things. Having conversations is what it's really all about.
David Chused:
And as I mentioned earlier, next week is a perfect opportunity as many folks gather around the Thanksgiving table to do just that.
Joel Carlton-Gysan:
Well, thank you Leslie and David. And Dmitry, how do you also bring in conversations about family and financial planning? I know you're looking at, people are thinking about how they're going to be taking care of their heirs and thinking about philanthropy in there. How is that part of your conversation too?
Dmitry Isenberg:
Well, typically when you start a conversation giving and philanthropic ideas are not at the top of the list. Most of the time, most of my clients care about if they have enough, if they're going to outlive their money. But eventually, once we run a financial plan, we show them different scenarios and give them a sense of comfort, that's when they start to open up and talk about things that really matter to them.
And basically, at this point, once they realize that there are a number of tax incentives involved to help them contribute to the initiatives they care about, that's when they actually start to listen and the conversation starts keeping up. It's not easy to bring children into the conversation. Lots of parents are very protective of their net worth. It is usually toward the end of their lives they start to open up. But in general, it is a process. Just because somebody decides they want to start giving and they want their children to continue once they pass, that doesn't mean that they're on the same page with their kids. And quite often it takes time. Sometimes you have to have a one-on-one conversation with their children, and then you need to circle back to the parents. So in that sense, you're not just a financial advisor, you're more like a financial psychologist.
And sometimes it's a grind. Sometimes it takes months, if not years, to get everybody on the same page, especially when children go to a different school. And I don't want to use the phrase kids these days, but I guess it's on everybody's minds. But it's a process, but eventually it's possible to get everybody on the same page.
Joel Carlton-Gysan:
You just mentioned the word grind. Is there any advice you have for helping people to make it not feel like a grind and something that is a bit easier to talk about?
Dmitry Isenberg:
It always helps to figure out the intent. In other words, you have to identify the elephant in the room nobody wants to talk about. But once you get through that point and sort of make sure that everybody understands that we all try to get to the same objective without hurting anybody's feelings, that's typically when the process starts to pick up and things start to get moving.
Joel Carlton-Gysan:
Thank you. And David, from your perspective of working for a nonprofit organization with backgrounds and other nonprofits, how have you worked with individuals who then need to work with their families on larger gifts? Is there anything that you have shared with them, how to talk about their wishes to be able to have the impact that they would like to have?
David Chused:
I like to listen to what they share with me and certain buzzwords. And depending upon their particular circumstances, it can be also depending upon their age. I'll ask whether or not they want their children involved, at least in connection with a particular gift. But more generally, I'll just encourage them to consider including their family members as part of their giving strategy. And one important thing that we try to do is encourage modeling of philanthropy, from one generation to the next so that when parents make contributions, then the children see that, it's part of their upbringing and so forth and they carry that forward.
Joel Carlton-Gysan:
Thank you. Thank you. Appreciate you sharing that information. Leslie and Dmitry, one of the questions that I get when I'm talking to donors and hear from them about their thinking about their estate plans is they're always trying to navigate the subject of wanting to make sure that they want to take care of their heirs, but they want to give them enough, but not too much. That's a question that I have from some people. Is there any advice you give when people are thinking about that, that they want to make sure that their children or grandchildren have enough to live on, but at the same time that they have, that it's not just spoiling them, so to speak?
Leslie Effron Levin:
So I would say that the question of how much is enough comes up frequently and that for some clients... thank you. All right, now maybe I'll stop coughing.
Joel Carlton-Gysan:
This is live. You can see this is live.
Leslie Effron Levin:
Sorry everybody.
All right, so how much is enough? Everybody's got their different viewpoints on that. Some clients feel that every single penny needs to go to the children, charity begins at home, so to speak. And that you give it to the kids. And then if you've taught them the value of taking care of the world, that tikkun olam concept, that with the inheritance that you give them, they will hopefully use some of it to take care of the causes that are important to them. And whatever life dishes out to them, they will say, "Okay, well, I have a little cushion here I inherited and I can give money to whatever my favorite causes are." Other people are very philanthropic. It's really part of their core situation. I have some clients who like to tithe and that concept of they have to give 10%. And we will include formulas in their documents so that way they can leave 10% of their assets to one or more charities.
I have some clients who will set up foundations or donor-advised funds and they will will make a donation to that foundation in their will or to the family foundation, or they'll set it up during their lifetime and they'll say, "I don't need to leave anything in my will because I already created this thing during my lifetime and it's off and running. And I've involved my children, they're on the board of directors of my foundation. There are people who can direct gifts as part of my donor-advised fund." And so by including the children in the decision-making, they're able to not necessarily carve out more dollars for charity, but maybe with existing pots that they've already created during their lifetime, to ensure their children are actively involved in how to dole that out and hoping that the children will continue to give to the foundation or give to the donor-advised fund so that way it continues.
Some clients will set up charitable trusts and they'll say, "Okay, I'm going to give it to the kids first, and whatever's left over goes to charities." Those are charitable lead trusts. Other people say, "I want to do a certain project or something specific with a charity, so I'm going to give it to the charity for a term of years and then whatever's left will go to my kids or my grandkids." So that's a charitable remainder trust. So there's lots of different kinds of vehicles and ways to talk about it and to give.
Something Dmitry said actually rang a bell, where suddenly when you explain the tax effect of something that now they're listening. Now they're willing to maybe increase their philanthropic giving because there's a tax element to it. So what I sometimes we'll see is, in fact, I just did a will like this for somebody where they gave a formula amount up to the amount that they could leave before state tax was going to be incurred to their grandchildren, and then anything above that went to charity. And they're very philanthropic. And so that was how she wanted to do it, we structured as a formula.
Other people, when they have a big capital event, they sell a business. For example, they'll create a family foundation or they'll fund a donor-advised fund because they want to give a large chunk of money from this deal to offset the capital gains. They'll have a charitable donation so the two things will offset. So there's opportunities when there's big tax events to have these kinds of conversations with families. And sometimes they think, well, I'd rather give it to charity than to Uncle Sam. And so therefore, if it can't all go to my kids because it's either going to trigger a tax and go to the government, then I'd rather not trigger the tax and give that same amount to my favorite charity.
So it's having those conversations. But again, it's all about the conversations. It's having those conversations and getting them started. But I'll also say on the foundation and the donor-advised front is that sometimes families will set these things up and they'll bring their kids onto the board, and the kids really don't want to be involved. And that maybe the foundation is restricted and it only is to save the whales and the kids don't want to save the whales, they want to save the polar bears. So they don't want to be involved in their parents' foundation to save the whales because they'd rather be doing something else to save the polar bears.
So it's important when you're having these conversations with the parents is that they're realistic and they set realistic expectations as to after you're gone, do the kids want to continue this or do they want to do their own thing and maybe they want their own foundations. And we've actually had situations where we'll take an existing foundation, we'll split it into two foundations so that way they'll have two foundations going where each kid could do their own thing. Still doing something charitable, still seated by that original money that the parents set up and that concept and that discussion of take care of the world and successive generations.
Joel Carlton-Gysan:
Thank you, Leslie. Actually, I needed to actually personally update my estate plan at this time. So the information that you all are sharing is really helping me right now with some of the questions my wife and I should be actually asking. So thank you.
David Chused:
Joel, if I can interrupt for a second and ask Leslie a quick question, which is you mentioned, you gave an example earlier of 10% going to charity under the terms of a will or a trust, and we also discussed donor-advised funds and how when a parent has died, maybe the child would be the successor advisor. Have you seen a circumstance where in the terms of a will or a trust, the executor is directed to consult with children in connection with the designation of the particular charities that might receive, in this case, the 10%?
Leslie Effron Levin:
So sometimes they'll be very specific and they'll say, "I want it to go to Brandeis." And other times they'll be broader and they'll say, the executor or the children can choose a charity that furthers educational objectives, that has something to do with education. So it doesn't have to be Brandeis, it could be Purdue or it could be wherever, or it could be their elementary school. It doesn't necessarily have to be college. And so, depending on the family and how they want to do it, they can either get very specific or they can leave it broader. Sometimes I'll even draft it where they look at the past five years of income tax returns to see what charities they've been giving to because people change. So today they're giving to save the whales, but tomorrow they're saving the polar bears. And if their will just says, "I want to save the whales," but by the time they died, they're not into whales anymore, they're into polar bears, not everybody runs in to update their will when they want to change who they're saving.
So by leaving it broader and saying, I want to do a class of Jewish causes, or look at my last five years of income tax returns or let my kids decide or let my executor pick and giving maybe broader buckets of something with healthcare, something for cancer, then you give that flexibility. Because life changes and the causes that are important to us. Change over time, certain things are always static, but other things very much change and are fluid. And by having those conversations, the kids will know, "Well, these are the causes that were important to mom and dad." So I have a client who had a foundation and there were certain things that were really important and they used to sit the kids down at the table and talk about certain things.
So now that both parents are deceased and the kids are now running the show trying to decide if they should continue the foundation or not and what monies to give, it was great. All of a sudden the daughter was saying, "Oh, you should be saying to her brother, remember when mom always talked about Planned Parenthood and how important that was to her and that she would get on her soapbox and she would start talking to us and we would all tune out because she'd go off on these tangents about Planned Parenthood and all these things." That was mom's cause and the kids had this whole little trip down memory lane and it sparked all these little side conversations. And eventually I wrangled them sort of back in to focus on, "Okay, guys, we have to decide on where we're distributing money."
But because of that moment, not only did they now knew that they were going to give some money to Planned Parenthood because mom would hurl a lightning bolt at them if they didn't, but also they had this nice shared moment and this nice shared memory and this other thing that there was a dinner they were talking about, "Remember that time at dinner when mom was talking about this," something had happened in the news. And it sparked all this wonderful dialogue and these conversations. And that's why these philanthropic conversations are so important because it's not just about, well, what's really in the will or what am I really going to do, or how big is that check? It's all those other things that come along with it. It's all those life moments of everyone sitting around the Thanksgiving table being thankful and saying, "I'm thankful for that Uncle Bob beat cancer this year. So you know what? I'm going to make a check. I'm going to give some money to the American Cancer Society in his honor because I'm so grateful that he's sitting at the table with us."
It's those kinds of conversations that spark these dialogues and letting clients know they can be small, certainly be great if they're big. But any amount is appreciated by these organizations. And sometimes it's about the volume of donors that give. So I know one metric that Brandeis uses and that helps with rankings is how many alumni give to the school. It's not necessarily about how big those checks are. It's actually what percentage of alumni are giving. So just sharing all these little tidbits with clients, letting them know their choices and options, I call it walking around the buffet and picking and choosing what makes sense for them, and they're surprised oftentimes.
Joel Carlton-Gysan:
I like the buffet metaphor there. It really hits home, I can see that. So Dmitry, I want to move to you and I want to ask you, Leslie was actually talking about a number of different types of financial and estate planning vehicles. And just wanted to get from your perspective, what are some of the ones that you recommend to your clients and do you actually have an order of priority of what was most helpful, what is not when it comes to philanthropy or thinking about their long-term plans?
Dmitry Isenberg:
Right, but before that, I just want to make a quick comment about what Leslie said. She hit all the major points about how much is enough. All I want to say is that in my experience, it could be very subjective. You can run all sorts of scenarios, but at the end of the day, a client may simply have a number in mind. There is not much you can do about it. The second point is you really need to be mindful of changes in the tax code. So for example, last year, SECURE Act 2 came out and made significant changes to how inherited IRAs are treated. It used to be that you pretty much spread it out over the expected lifetime of the person taking over the account, and they would take two, 25% out of that account and won't add up too much. Now, under the new guidelines, you need to pretty much empty the account within the next 10 years, meaning that on average, you need to take out one 10th of their accounts value.
And considering that people who inherit that account they're typically in their prime years, they're already in the highest tax bracket, so to speak. When you factor in federal and state and sometimes city tax, that number really adds up to close to 45, 50%. So with that in mind, people now should start looking at different strategies when it comes to IRAs. And considering between two partners, you can contribute up to $200,000 per year to a charity of your choice without paying any taxes. That's one of the things by looking at, using up IRAs to contribute to charities.
Having said that, I'd say donor-advised fund is probably the most popular vehicle right now, especially with the people who only getting started.
Joel Carlton-Gysan:
Why is that?
Dmitry Isenberg:
It's relatively easy concept. It is very easy to set up. We do that all the time. Basically, you take the write off right away in the year you make a contribution. You don't have to specify the charity of your choice right away. You can do it at some point in the future. The money gets invested, grows tax-free. So the concept is very simple, people like it.
It is only later when you develop a taste for philanthropy and start planning ahead and bring in the next generation into the picture, you start looking at different strategies. And actually, at this point, I bring another specialist, somebody like a strategic wealth advisor that would be a person coming either from Merrill or Bank of America if we're talking about something more substantial that involves a few siblings running the same business who have different ideas about philanthropy and things of that nature. So as I said, at this point I'd like to bring in a specialist.
Joel Carlton-Gysan:
Thank you. And Leslie, do you have anything to add about the specific types of strategies or vehicles when you're working with your clients?
Leslie Effron Levin:
I think one of the things that Dmitry hit on was using IRAs to give to charities, and because of the big income tax savings that you'll have. So for clients that are charitable, if they're going to leave $100 to Brandeis in their will, I tell them, look, you could do the same thing just with your beneficiary designation. And the difference is that while both times it's $100, when it's through your will, it's going to be $100 less the income tax versus if you're going to leave $100... I'm sorry. If you're going to leave $100 to your kids and $100 to Brandeis, and you're trying to decide which pocket to take it from. If you did it through your IRA to your kids, there's going to be an income tax hit. If you instead have the $100 flow through your will and the $100 to Brandeis go through your IRA, then there's no income tax hit on either side. So it's much more tax sensitive to do it through your IRA.
And the nice thing also with changing your IRA is you don't have to go to the attorney to do it. You can just go to Dmitry and say, "Hey, I need to change my beneficiary designation. Give me a new beneficiary, a change of beneficiary form," and do it. I will say though that if you do do that and you want to use your beneficiary designation with your IRA to be philanthropic or whatever you're going to do, is that you should let your attorney know that you did it and that you went rogue and did something on your own, just so that way the attorney knows what's happening with your estate plan, what your priorities are, and has all the relevant information. So even by emailing a copy or mailing, sticking a copy in the mail to your attorney to say, "Just want to keep you in the loop. I just did this, I made this change with my financial advisor," is really important.
And having the financial advisor and the attorney and the client all working together, I call it my three-legged stool, is really important because Dmitry is going to look at it from one angle and I'm going to look at it from a different angle. And both of us are bringing really good expertise to the table. But by looking at it from two different sides, we're better able to help the client. And then when you throw the accountant in there, you got a really great mix and we've got our four-legged stool, we've got a chair. And it really benefits the client of all the advisors talking to each other and sharing information. And that way the client is best served through all of that.
Joel Carlton-Gysan:
Yes, yes.
Dmitry Isenberg:
If might just jump in just to touch upon something, which I think is important. When it comes to IRAs, it is in my opinion, not an optimal vehicle when it comes to recognizing the intent and the will of the person passing it on to the next generation, primarily because the only thing you can do, you can specify a beneficiary, but that's about it. You can allocate the percentages, but that's about it.
And I apologize for the shameless plug, Bank of America Merrill Lynch has something called the trustee IRA, and the idea is to have a trust around IRA, meaning that you put it together as a trust, you specify everything you want to specify as if it were a regular trust, and you put it around an IRA. So the idea is when you have somebody, for example, if you have concerns that if your child going to blow through that money once they get their hands on it, you can specify that provision in the trust. And basically, a financial advisor would work as a trustee to make sure that the will of the person passing on the wealth is fully respected by their heirs.
Joel Carlton-Gysan:
Yes. Well, thank you, Dmitry. I didn't know about that. And David, how do you recommend, or from a charity's perspective, how does Brandeis recommend people share their intent when it comes to something that might be in a retirement account?
David Chused:
Sure. What we do here at Brandeis is, Dmitry just mentioned that with respect to beneficiary designations, typically it's just a number. It could be a percentage, it could be a dollar amount and that sort of thing that goes directly to whatever the charity is that you choose or charities, plural.
What we do here is we'll prepare what we call a side letter that a donor can do themselves that will direct... oh, and by the way, to the extent, for example, in this case Brandeis, receives anything from my IRA, I would like it applied in furtherance of scholarships or in furtherance of the athletic department or something to that effect. So that side letter gives the donor the ability to specifically direct how they want an absolute beneficiary designation, charitable gift to go. And it also, it's something that side letter is something that can be done without a lawyer. It can be changed over time. So there's a lot of flexibility there. And certainly, in the Brandeis case, it is our policy to comply with any written instruction that the donor leaves in connection with any contribution upon their passing.
Joel Carlton-Gysan:
Thank you, David. So the side letter doesn't talk about the amounts, it just talks about how they would like it to be used.
David Chused:
Exactly. Correct.
Joel Carlton-Gysan:
Thank you. Now, now jumping back to one thing that Leslie said is that talking about the many legged stool. When I've worked with alumni who wanted to support the university, I remember one asked, when I was told her I would share some information with her, she said, "Well, I'd like to make sure that my estate attorney and my advisor read this." And I'm like, "Absolutely. I strongly encourage that." I always encourage that because I feel that advisors know the donor's whole situation. And with that, actually, I'm going to jump in. We have a question from the audience that has to do with advisors and they actually ask, do advisors encourage charities to reach out and introduce themselves so the advisors can market them as recipients of planned gifts, or is that not helpful? More or less, I think that it's saying would it be helpful for charities to get to know the advisors in their areas or the advisors that potentially could have interest for them just to make sure those connections are strengthening any connection or build connections. What do you think about that, Leslie and Dmitry?
Leslie Effron Levin:
I think I sometimes get asked by clients for recommendations for charities and they will say, "I want to do something about"... actually, I had this come up once about they wanted to do something with orphans. And I had another client who was an orphan herself and was very involved with this particular organization. And so I'd gotten to know more about this organization and working with that client. When another client mentioned it, I knew about this organization, I'd already been talking with them and in connection with the planning for the other person. So I now said, "Oh, well I know of this organization. I'm happy to connect you and put you in touch so you can talk and see what your thoughts are." So I like to get to know certainly, the organizations in my community so that way I can make recommendations if clients ask me.
I don't want to foist charities on clients. So it's that fine balance between, "Hey, I think you should give to Brandeis, I hear it's a great school," versus just having that generic conversation about philanthropic giving, finding out what's important to clients. And then to the extent they say, "Well, this is important to me. I want to support Jewish causes and I want something that's broad and does things in my local community and things that does things overseas and in Israel, and do you know of anything?" And I can say, "Sure, I know all about UJA and this is what they do, and I can connect you with so-and-so." So those relationships are important. I make a point to go to events in my community so I can meet them. I make a point to do one-on-one with different organizations so that way I can build those relationships in the community.
And then sometimes, also, my firm is very committed to being very charitable and philanthropic. And so it gives my firm the opportunity to participate, whether it's a 5K or donating canned food to something, or right now we're collecting gifts for the holidays with two different organizations. So it gives me a chance to broaden that philanthropic reach to other people in my own firm and to the firm itself. And then those lead to more conversations and we're right back where we started with, it's important to have those conversations.
But I do want to touch on one thing, I'm going to digress for one quick second.
Joel Carlton-Gysan:
Please do.
Leslie Effron Levin:
When we were talking about different vehicles and with donor-advised funds and Dmitry was mentioning how they're really good, especially for people just starting out, I really want to echo that. Donor-advised funds are so much easier to work with than foundations. It used to be when I first started practicing, lots of people were into these family foundations and we were creating them left and right, and now I find I'm dissolving them left and right. And that the administrative burden on them, especially as the funds deplete over time, it becomes really burdensome.
So donor-advised funds can be a really great way to have that big pot that somebody where they want to dump it in and give to lots of different causes, but then they don't have that administrative burden of doing income tax returns for the foundation, having board meetings for the family foundation and all the compliance issues because people think, they don't realize that it's an actual entity, it's a corporation and you have to have compliance with it. And there's all sorts of forms that you have to file with the state and with the federal government and all sorts of things in order to be compliant.
So even though you might start small with a donor-advised fund, they actually can grow. And I don't know, maybe Dmitry can speak to this, if there's a cap on how much, for example, his firm has on how much you can put in a donor-advised fund. I don't know if there is from firm to firm. But I would say I almost want to push clients unless they're doing a specific project. So they're actually doing scholarships or they're tutoring kids at the community center, something, they're painting fences, whatever it is, then you need your foundation. But if it's just a vehicle to be able to give money to Brandeis and money to save the whales and money to UJ or wherever you're giving it, donor-advised fund might be the way to go on that. Sorry for digressing.
David Chused:
And by the way, in addition to all of the administrative burdens that you mentioned, Leslie, there is of course, there are underlying complexities in setting it up. And of course, there are the legal fees. So all of those things can be sidestep and you can achieve essentially the same substantive results with just simply opening up a donor-advised fund exactly as leverage here.
Joel Carlton-Gysan:
Thank you. So Dmitry, I think there was two questions that were asked of you. One is about do advisors encourage them to reach out and introduce themselves? And then also, Leslie brought up a little bit more about the donor-advised fund, and I know Lisa has a question there. Any thoughts?
Dmitry Isenberg:
Yeah, I'll start with the second question. It is an interesting question. It's a problem I'd like to have. To the best of my knowledge, I don't think that there is a limit. There is a minimum amount. I'm not 100% sure, but I think it's something like $5,000 to start a donor-advised fund. So it's relatively low amount just to get started when it comes to charities reaching out to financial advisors, I mean, it's highly encouraged. But it's a good idea to identify the advisors that specialize in working with nonprofits. If that's the question, I'd be happy to help. Just shoot me an email and I'll put you in touch with people specializing in that.
Joel Carlton-Gysan:
Okay. Well, I think we should open it up to some questions. Again, please submit your questions in the chat box, in the webinar dashboard, and I will be glad to ask them. One question that we have is that, is there a better time for people to transfer their assets, whether it's the next generation or charity, during their lifetime, after they pass away, combination, what do you think?
Leslie Effron Levin:
I think a lot of it depends on the family and the client. So it comes back to, we were talking about before how much is enough to give to your children? But there's also that sense of panic for clients as to how much is enough that my clients are living to 100 these days. And when they chose to retire at 65 and they thought people were going to die at 85, their money was set to last for another 20 years. Now that they're living to 100, their money's got to last an extra 15 years beyond what they thought it was going to last. And so I've got a lot of clients getting panicky as to how much is enough for them to live on, let alone how much to pass to the next generation or to charities. So I'm seeing some new issues come up because of longevity issues that are happening.
And a lot of these people that are living longer are also living independently. I was just talking with a client who was 98 living still alone and doing great. Not everybody is 98 and frail and in nursing homes. It's a real mixed bag out there. And so when clients are thinking about when is the right time to make a gift, one of the conversations I have with them is to remind them that whether you're giving them money to charity or you're giving it to your children or your grandchildren, that once you make that gift, it's gone and you don't have it anymore. So it's important for them to understand and then to circle back with their financial advisors, again, that three-legged stool concept of, okay, well go model that. And if you give that size gift away, can you put food on the table?
We had this conversation yesterday with a client who has two children, neither one of them really have their act together. They both are in debt up to their eyeballs, and the mom just keeps throwing money at them. So we're saying, all right, rather than just throw money at this, and every time they ask for a handout, just giving it to them, maybe let's focus on something, a planned gift. How much can we give them, maybe it's a monthly amount, maybe it's an annual amount. How much can you afford to give? So this conversation we had with the financial advisors who were modeling numbers trying to figure out, okay, it's this amount we can afford to give before it causes a financial burden. So it's that same conversation regardless of whether it's charity or children or anybody else, that how much is enough needs to be part of those conversations at all levels.
Joel Carlton-Gysan:
Thank you, Leslie.
Dmitry Isenberg:
As I said in the beginning, the primary concern among my clients with a net worth between 1 and $5 million is whether they're going to outlive their money. And when you realize that people are living longer, no matter what statistics tell you, but on average that... Alzheimer, if you're diagnosed with Alzheimer or, well, it's probably too late at this point. But if you think there is a possibility of ending up with Alzheimer's or some sort of debilitating disease, and there is a chance that you're going to end up not necessarily in a nursing facility, but you're going to need some kind of professional help, not just for a year or two or maybe for 10 years, that's when you start having certain issues and question if you had enough. And one of the ways I deal with it is I make sure to incorporate long-term care conversation with my clients.
We don't necessarily try to come up with enough funds to take care of the worst case scenario because the probability of that is probably below than 10%. But you want to make sure that the clients understand the benefits of the long-term care, especially if there are other needs, such as leaving X amount to their children, let alone leaving to the charity is part of their mix. So to me, as I said, the conversation starts with financial planning, understanding what the client's priorities are, understanding what their lifestyle is, understanding what really matters to them, and everything else is secondary.
Joel Carlton-Gysan:
Thank you. Thank you. And Dmitry, with what you're talking about, I think one thing, there's a bit of a lack in this country is financial literacy, where it seems that a lot more people need to understand how they should be saving. Do you recommend to clients to pass along any financial literacy or thoughts to their, again, thinking of that generation, generation to their children, to their grandchildren, when you're working with them on their financial plans to make sure that that literacy can go on to future generations?
Dmitry Isenberg:
I am biased, but I'll say it, start saving early.
Joel Carlton-Gysan:
Yes.
Dmitry Isenberg:
I have a number of clients, established physicians, dentists, who didn't bother to start saving until well in their 50s, and they're not happy where they are.
Joel Carlton-Gysan:
Yeah. Yes.
Leslie Effron Levin:
I think to that financial literacy point though, I just had a conversation today. Client was telling me how her grandson really gets it and just can understand concepts and even explain something to her one day. And that her granddaughter, who's lovely and smart, it's just not her thing, she's never really focused on it.
And so I said, "Well, maybe you should talk to her." She said, "No, no, no. Her brother will talk to her, and if she has any questions, she'll ask him." I said, "That's great. I'm so happy to hear they get along. So many of my family, the kids don't get along. But wouldn't it be better if somebody had a conversation with her about understanding financial literacy now rather than just relying on her to ask her brother when she has a question? Because she might not know even the questions to ask. So wouldn't it be nice to introduce her to your financial advisor or just you or your daughter to sit down with her and have a conversation now that she is getting ready to graduate college in another year, she's going to be on her own, she's going to be independent. Does she know anything about budgets?" Having these conversations is so important.
And it was, you could see the light bulb going off in grandma's head like, oh, I really just figured it would all take care of itself, I hadn't really thought about that. So there are a lot of things that we sort of just presume people are common sense and thinking about. And of course, they're thinking like, oh, my kids know how to budget and do all that. I'm seeing it for myself with my son who's in college and doesn't know how to budget properly with food. And we're seeing these astronomical food and grocery bills, and my husband's going, "What are you spending this on? What's going on?" And I said, "We've got to teach him. He can't go from zero to 60 in one fell swoop. We've got to explain to him how this works." We didn't realize there was a gap in knowledge there. And now that we know, we got to really sit him down and explain and show him how it works.
And that's our job as lawyers and financial advisors to really sit down with our clients and plant these seeds for them and ask these questions that are prompting them to then think and get those wheels spinning about all these things that maybe they just haven't thought about because nobody asked them, and nobody ever said, "Well, what are you doing to solve this problem?" And they don't even realize there's a problem there until you bring it up and say, "Well, does your granddaughter know the first thing about finances? What happens when she inherits this money from you? What's going to happen?" And then you get these blank stares.
But then that starts the conversation, and we're back to where we started today, is having these conversations about all different things. So many aspects of financial planning, estate planning, philanthropic planning, they're all really very interrelated and just goes back to just having these family conversations and introducing the next generation to your wealth advisors. I was telling Dmitry the other day that it shocks me how few families use the same financial advisor from generation to generation. To me, that just seems logical that you would bring in the generations to know, "This is who I use to manage my money, you should meet them and you should talk to them now that you're working. Maybe you don't have to use my guy, but you can use your own guy, but at least talk to my guy." I don't see that happening a lot. And it surprises me, and I think it needs to happen more, at least to get those conversations and those relationships built because there's a lot of family trust in there.
Joel Carlton-Gysan:
I think it's very interesting, Leslie. The thought that just came my head with everything you said, there is one way that we can help our future generations is definitely letting them know who can help them. So as an attorney, as a financial advisor, philanthropic advisor like David, myself, what are the resources they have out there? Because they can't know everything. So that's a great point. We only have a couple minutes left. I thought I would just let you all see... you've shared a lot of wonderful advice today. Is there one thing that you would like everyone to walk away from this presentation or anything else you would like to share? We can go through, everybody can chime in here.
Leslie Effron Levin:
I'll say, a lot of times clients are scared about updating their estate plan. So when they want to make a change, they come away from this saying, "Oh, wow, I really would love to include charities as part of my estate plan. But now I got to go change my whole will and I got to call the lawyer and it's going to cost me a lot of money." And so what I tell clients is, "Look, everything's on the computer these days. If all you're doing is coming to me to say just add in, I give $10,000 to Brandeis, and that's the only change you want to make, my assistant can make that. And you hit print and you come in and sign, and it's not going to cost you a lot of money to do."
But by telling me and reaching out to me, I want to give $10,000 to Brandeis, I need to update my estate plan, maybe there are other changes you want to make. Maybe it sparks a conversation about, well, now you've got grandchildren. What do you want to do? Do you want to do any gifting? It gives us the opportunity to talk. We can do that. We don't have to do that. We can just do it as simple as, no, I don't want to talk. I don't want to update everything. I don't want to give it a well baby checkup. I really just want to do this one thing. And you can do that. This isn't the old days where we had carbon paper and had to retype a whole will from scratch and it would cost you an arm and a leg. But it gets those conversations started. So don't be afraid if it's something you want to do. But if you don't want to go back to your attorney and update your will, then you can go to your financial advisor and you can do something with your IRA.
You can open a donor-advised fund. There's always choices. You can even go directly to Brandeis, for example, and there are charitable gift annuities you can do. There's life insurance things you can do. They can put all sorts of ideas in your head and do a lot of brainstorming with the professionals, whether it's Brandeis or any charity. All charities have these financial advisors who can give you ideas and can say, well, these are some of the things. These are how much it would cost to do X, Y, and Z if you wanted to do a big thing. You can also just write the $18 check. And then you have choices. There's always choices to make. And don't be afraid of making those choices and pulling the trigger and just doing something. But don't let inertia rule the day and stick your head in the sand because you just think it's overwhelming. We can break it down and make it an easy, affordable thing to do.
David Chused:
And just to underscore the point that Leslie just made, there are a lot of very simple, easy, not scary options that folks can consider, that are cheap and easy to do and can move their plans forward. And I strongly encourage folks to give thought to those easy solutions.
Joel Carlton-Gysan:
Is that your final thought, David, right there?
David Chused:
It would be. It's not rocket science and there's no boogeyman here, but there are very easy ways to take care of these things.
Joel Carlton-Gysan:
Thank you, David. And Dmitry?
Dmitry Isenberg:
Start writing things down. Get a financial plan, put it on paper. You'll have a much better idea where you are compared to where you need to be.
Joel Carlton-Gysan:
Excellent. Well, thank you all to everyone who submitted questions today. If you have any additional questions, you're welcome to contact me at Brandeis office of Planned Giving. You can email me at PlannedGiving@Brandeis.edu. Our contact information will also be included in the followup email. And of course, I want to thank our panelists again for their generosity and sharing their knowledge today. Thank you, Dmitry, thank you, Leslie, thank you, David. And thank you again for all joining us. We hope to do more of these presentations in the future, so feel free to send us recommendations. Goodbye from Brandeis University. Have a wonderful night.
Leslie Effron Levin:
Bye, everyone. Thank you.
David Chused:
Bye.