Charitable Giving

Houston Families: Leave an Inheritance or Give to Charity ?

Published on: July 9, 2014 | By McCulloch & Miller, PLLC

Is inherited wealth making a comeback?

Is leaving an inheritance a good or bad idea? Well, it all depends on who you ask. For example, a recently published book by French economist Thomas Piketty, “Capital in the Twenty-First Century,” argues that estates are getting larger and eventually most of the money in the world will be tied up in huge estates. The argument is that this is bad. Why? Because the wealthiest people will have done nothing to earn the wealth themselves and much of the money will never be spent. Consequently, the money will just accumulate in estates and remain outside the greater economy.

Not all economists see this as a necessarily bad thing. In a recent article in The New York Times titled “How Inherited Wealth Helps the Economy,” Harvard Professor N. Gregory Mankiw explains how those who save their money and leave an estate to their heirs actually induce a redistribution of wealth from the owners of capital to workers. He states, “Because capital is subject to diminishing returns, an increase in its supply causes each unit of capital to earn less. And because increased capital raises labor productivity, workers enjoy higher wages.”

Art Valuation Vexation – The Taxman’s Test

Published on: June 30, 2014 | By McCulloch & Miller, PLLC

The tax law makes clear that the taxpayer has the burden of substantiating the value of the property. To this end, a taxpayer must not only comply with the procedural requirements for valuation, but must also persuade the trier of fact that his claimed valuation is correct.

How do you place a value on art? There is the subjective eye of the beholder that gauges the beauty of the art, and then there is the no less subjective eye of the market, the appraiser and/or the taxman. Be sure to properly plan for your artworks and ensure that they are appropriately (if usefully) valued, as seen through the eyes of the taxman.

The issue of valuation is always the issue at stake when it comes to taxes – be it with regard to real property, stocks, or something as mercurial as an easement – but with art there is both a special importance and a special irony. After all, art is only truly valuable when it is priceless, in one sense, but there is nothing that is priceless on the market.

What Do You Do With Your Houston Estate If You Have No Heirs?

Published on: May 20, 2014 | By McCulloch & Miller, PLLC

Today, with smaller families and more women choosing not to have children, “the dynamic has changed pretty significantly for the generation of baby boomers. The option of doing something charitably significant with their estates is a change,” he said.

The New York Times recently touched on the subject of estate planning without a family. It is an important topic for those without future generations to inherit their assets. If this issue affects you or someone you know, then be sure to read the article titled “In Estate Planning, Family Isn’t Always First.”

In the beginning and in the end, estate planning is always about disposing of your assets. Both in popular imagination and in the laws on the books, this commonly means the how and why of giving it to family members. Nevertheless, even with no lineal heirs to inherit your assets, there remains important decisions to be made. Optimistically, this means the sky is the limit.

Does Your Houston Charity Follow Through?

Published on: May 9, 2014 | By McCulloch & Miller, PLLC

Picking the right charity can be so complicated that it makes picking stocks look easy.

When you give to charity, do you ever wonder if your donation is really going where it's intended? Or if your gift is doing the work you intended?

If you are wrestling with these and similar questions, you may be interested in a recent article in The New York Times titled “Donating, and Making Sure the Money Is Put to Work.”

Foundation Renovation: Donor-Advised Funds

Published on: May 5, 2014 | By McCulloch & Miller, PLLC

[Donor-advised funds] promise a number of advantages over foundations, such as lower annual costs, more privacy and no required minimum payout each year. A big difference between the two is control.

Running a charitable foundation can be richly rewarding, yet exhausting. Now there is a popular alternative to a full foundation and a move to collapse back into what is known as a donor-advised fund.

If you or your family run a charitable foundation and are considering this alternative, The Wall Street Journal had a few points to consider in a recent article titled “Risks to Consider With Donor-Advised Funds.”

Houstonians May Note Increase in Charity Spend-Downs

Published on: April 24, 2014 | By McCulloch & Miller, PLLC

About 50 years ago, only 5% of the total assets of America's largest 50 foundations were held by spend-downs. In 2010, that number had risen to 24%, according to Bridgespan Group in Boston.

Today's charitable foundations seem to be shifting from maintenance for longevity to spending down and winding up.

This trend was identified in a recent article in The Wall Street Journal titled “The Rise of Spend-Down Philanthropy.” The hard numbers in the article come from an analysis by the Bridgespan Group which found a marked jump in spend-downs. As reported there, “About 50 years ago, only 5% of the total assets of America's largest 50 foundations were held by spend-downs. In 2010, that number had risen to 24%, according to Bridgespan Group in Boston.”

No Need For Your Life Insurance? Donate It To A Houston Charity!

Published on: April 16, 2014 | By McCulloch & Miller, PLLC

There are several ways to donate a life insurance policy to charity, according to the Planned Giving Design Center, Monroe, NC.

There are many advantages to life insurance as it can be a cushion against high-cost issues or a source of much-needed cash flow for your family. However, you might end up not needing it all. If this is the case, what do you do with the policy?

The good news is that you can kill two birds with one stone. Have you thought about donating your life insurance to a worthy cause?

Do Small Family Foundations Have Big Impact in Houston?

Published on: April 10, 2014 | By McCulloch & Miller, PLLC

… Large-scale strategic philanthropists are forcing family foundations of all sizes "to re-examine whether they're approaching their giving in a way that's likely to have the biggest impact." And, sometimes, as Pierce has found, a bigger impact can come from foundations of smaller sizes.

Small family charities and foundations can often be overshadowed by big-time charities– the Gates Foundations, the Case Foundations, former presidents and the Rockefellers of today. It’s an unfortunate problem of recognition that the Wall Street Journal points out over in “Small-Fry Family Foundations,” and many new charities face.

Many new retirees are ready for a new challenge and a second career of giving back. After all, once they are playing the “back nine” of life, several new retirees are looking to make a difference with the fruits of their life’s work. Many choose to create a family foundation to make the most meaningful use of their time and money, not to mention to achieve their charitable objectives.

What Will Become Of The IRA Charity Rollover?

Published on: February 24, 2014 | By McCulloch & Miller, PLLC

You were so helpful to me in September, clarifying the IRA charitable contribution. Do you know if the government is instituting that same contribution this year?

We are well into tax season and planning for the upcoming year. Are you keeping up with the tax laws? As many retirees and their advisors review changes in the tax laws and begin their planning, they have one important question in common: “Will Congress revive the IRA charity rollover?”

Coincidentally, these taxpayers and advisors will be interested in a recent article in The Wall Street Journal titled “Will Congress Revive the IRA Charity Rollover?”

Legacy Planning in Houston – Your 10 Step Plan

Published on: February 5, 2014 | By McCulloch & Miller, PLLC

Giving back is about linking passion with action, and it does not have to be complex—but it does have to be well thought out to be effective.

As many well-to-do but generous Americans can attest, your philanthropy can do more than just help the cause or causes important to you. So why not bless your family as well as your charities as part of your legacy?

To make philanthropy a part of your legacy, you do not have to be a Carnegie to have your name put on this or that building. For most of us, our family is our most important and lasting legacy. Consequently, philanthropy can be what binds a family together and passes down real enduring values to the younger generations, all while doing tangible good today.