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(Part of a series of articles on charitable giving and the Union County Foundation by David Vollrath - Exec. Dir.) Our prior articles discussed the "good inheritance" principles of "right time" and "right amounts." The third important principle to consider in a "good inheritance" is the type of property to be transferred. Some parents simply transfer whatever property they have to their heirs but frequently it is possible to choose the type of property to be transferred. Many parents begin transferring wealth during their lifetimes to their children in the form of cash gifts. It may be more desirable to consider gifts of stock, land, or partnership units. Studies have shown that gifts of cash while the parents are living often result in the cash being spent quickly. While the intentions of the parents are admirable often the cash gifts are received by sons and daughters who are poorly skilled money managers. This pattern of receiving cash gifts may not encourage the children to develop their money management skills and to learn how to build and conserve their own estate. A possible solution may be to replace the cash gift with a gift of stock or land. The benefactor of your gift (your child, niece, nephew, etc.) is much more likely to hold onto the stock or land as an investment than the gift of cash. Learning how to manage an asset and recognizing how property can increase in value over time are resulting benefits of these non-cash gifts to your heirs. Obviously nothing stops your heirs from cashing out the asset you have gifted them but going through that process can’t help but teach important lessons on appreciated assets, capital gains, taxes, etc. Particularly if an inheritance is substantial the transfer of stock or property rather than cash may be your best choice. As a property owner or stockholder your heirs likely will have a better chance of becoming the good financial managers that all parents hope their children will become. By including charitable giving in your estate plan you teach your heirs valuable lessons about the importance of helping others. Children learn by example and your example of giving to charity during and after your lifetime is a legacy of which you can be proud. The Union County Foundation is equipped to help you achieve your charitable goals by providing pertinent information and assisting you with planned giving. Please call us at 937-642-9618, email commfounduc@imetweb.net, reference our website at www.emarysville.com/unioncountyfoundation, or stop by our Marysville office at 126 N. Main St. We are committed to helping you.... “preserve your footprint in time.” |
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