Houston Estate Planning Law Blog

RECLUSIVE MAN LEAVES MILLIONS TO ORGANIZATIONS IN HIS WILL

Anyone who has read our blog knows that making plans for your estate after you pass is an important decision that can never be considered too early. But what seems to stop many people here in Texas from continuing forward with their estate planning stems from the fact that they do not have any family members to share their wealth with.

Such was the case for an elderly man in Washington, but instead of halting his estate plans entirely, he decided that he was going to give back to a community that had given him so much over the years.

When the president and chief executive of the group Family Matters-an organization that helps under-privileged people in the community-got the phone call from the elderly man’s attorney she says she cried; not just because the man had passed away at the age of 100, but because the generous donation left to the organization in his will was more than twice the charity’s annual budget in a given year. She tells reporters that it took her some time to compose herself before returning to the conversation with the trust officer.

In total, the 100-year-old man had left $43 million to three separate endowments, $28 million of which was promised to Family Matters. The remaining $15 million was divided evenly among the National Symphony Orchestra and the Washington National Opera.

The man’s 62-year-old cousin, who helped oversee his affairs over the course of the last few years, says that it’s no surprise to her that he left money to them in his will. He had no family of his own-many of them already gone-and mostly kept to himself because of his considerable shyness. When he did go out, he spent much of his time attending theater, music and ballet performances.

“It’s almost as if he did appreciate the great fortune of his life and knew that with a stroke of a pen in his estate plan he could do something wonderful for people less fortunate,” his cousin explains adding that his secrecy surrounding his donations until after he passed was fitting for a man who kept such a considerably low profile all his life.

Source: The Washington Post, “Philanthropist Richard A. Herman leaves fortune to D.C. charity, symphony, opera,” Annie Gowen, Feb. 5, 2013

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COUPLE DONATES WORLD’S LARGEST AQUAMARINE TO SMITHSONIAN

One look at the Dom Pedro aquamarine and the only thing you’re able to articulate is, “Wow.” At a height of 14 inches and weighing over 10,000 carats, the obelisk-shaped gem is considered to be almost as rare as the Hope Diamond.

When Jeffrey Post, the curator of gems and minerals at the Smithsonian Museum, looks into the clear, Caribbean blue sparkle of the gem he sees more than a rare artifact; he sees a museum exhibit that would never had happened had it not been for the generous donation from a budding gem enthusiast and her husband this month.

The story begins in the 1980’s when a prospector saw the aquamarine wedged in an outcropping of rock. When pried loose, the gem stretched more than three feet long and weighed almost 100 pounds but it was not destined to stay this size.

After accidentally being dropped and broken into three pieces, the portion that would eventually become the Dom Pedro was sold to a third-generation broker. He then brought the gem to a skilled gem cutter who crafted the precious stone into the piece of artwork it is today.

Three years later, the owners of the gemstone wanted to sell. They first made an offer to the Smithsonian, asking for seven to 10 million dollars. Jeffrey Post was there when the offer was made and remembers laughing. “It doesn’t work like that. The Smithsonian collects via donations. We can’t just go to Congress and ask for $10 million for a gem,” he said.

It was money the museum didn’t have, but it was money a gem enthusiast and her husband did have so after buying and showing the gem at various exhibits around the world, they finally decided to donate it to the Smithsonian.

“We didn’t buy it for ourselves,” the gem enthusiast said. Now, besides reducing their estate tax for the future, the couple has shared a rarity with the world that could have remained unnoticed if not for their generous donation.

Source: The Washington Post, “The Dom Pedro aquamarine’s long and winding path to the Smithsonian,” Brian Vastag, Dec. 2, 2012

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IT’S NOT THE AMOUNT THAT COUNTS: LEAVING MONEY IN WILLS FOR THE RIGHT REASONS

Everyone in Texas has heard the saying “it’s the thought that counts,” but many people are saying that this really is the case when it comes to leaving money to others in your will.

It’s not a new concept to leave people money in your will but now a small-but growing-group of people are taking a public pledge to leave money to charities despite the fact that they may not have an exorbitant amount of wealth.

According to Giving USA, the research arm of the Center on Philanthropy at Indiana University, nationally, donations totaled approximately $218 billion, and not just from people with large fortunes. “As people have more confidence in their income, not only from their job securities but from the investments, then they feel more confident in giving their money away,” says Pierce Goglia, a spokeswoman for the Dallas-based nonprofit group Communities Foundation.

The nonprofit has seen an increase in donations since the economic crisis ended. Their annual Giving Day campaign raised a record $14.4 million this year from thousands of people in the Dallas-Fort Worth area, up from the $10.7 million in 2011.

Inspired by celebrities who are currently encouraging fellow millionaires to leave money to charities in their wills, a modest philanthropy movement has cropped up in cities across the nation. Dubbed “giving circles,” these groups allow for like-minded people to pool their money and give to causes they deem important. They are becoming the easy way for people who may not have a lot of money to help give a large donation to a charity or organization.

For many people, planned giving has to involve attorneys and legal advice, but according to some, that’s simply not the case. Though many aspects of estate planning do require legal help, some people would be shocked to learn that it can be as simple as changing the beneficiary on an IRA or adding a charity’s name as a “Transfer-on-Death” to a mutual fund.

Many people also have the idea that you have to leave thousands of dollars to people or organizations in their wills. More and more, people are beginning to see that this is not necessarily the case and that sometimes, it’s the sentiment behind the donation that really makes all the difference.

Source: The Dallas Morning News, “Charitable giving not just for the ultra-rich,” Hanah Cho, Nov. 10, 2012

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