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“Giving is good, but a well-defined gift might be better”

On Behalf of | Jul 14, 2017 | Wills & Trusts

When people sit down to plan a gifting strategy, they have the entire world to pick from, of course. But we tend to choose to give to people and places and organizations close to us.

While most people making estate plans leave some assets to their children and other relatives, some Brevard County residents might choose to leave something to the University of Central Florida Cocoa campus. Others might select a church or charity or nonprofit organization that represents their concerns and values.

A recent article by an attorney on estate planning points out that “giving is good, but a well-defined gift might be better.” She makes her point using illustrations of how organizations without clear directions can choose different ways of using gifts.

For instance, say someone leaves $25,000 to a fraternity for “scholarships.” No restrictions are placed on the gift, so the fraternity might award each year two scholarships of $500 each. Assuming the money earned 5 percent annually ($1,250), the frat would be able to give the $500 scholarships forever.

But what if the fraternity decided to give a single $2,500 scholarship per year? The gift would be used up after a decade.

Neither approach by the fraternity is right or wrong, the estate-planning lawyer points out. But without restrictions and directions from the person leaving them the money, they are free to make their own decisions.

For some people, leaving the decisions up to the fraternity (or nonprofit or school, etc.) is exactly what they want. Others prefer to exercise control over how their gift is used.

You can discuss both options with an experienced Brevard County estate-planning attorney.


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