We’ve slipped into the fourth quarter of the year – both good and bad for those of us who work with families and their philanthropy. Good, because if a family wants to make a tax-deductible gift this year, they have less than three months to get it accomplished and so are compelled to make to decisions and act. Bad, because pressure and time constraints lead to mistakes, poor choices, resentment and sometimes, regret. No one wants that.
It’s estimated that one third of America’s giving takes place in December alone – and 22% of online giving happens on the last two days of the year.
Yikes! That’s not planning – it’s reaction. No advisor wants to be in a position to tell their client family to go online and give their credit card information to the cause of their choice – and enjoy the New Year’s Eve party in the same sentence.
Early in my charitable planning career, I was funding one of the largest Charitable Remainder Trusts (CRT) I’d ever participated in. Standing in the lobby of a “big brokerage firm” at 4:00 PM on New Year’s Eve, waiting for an account to be opened and funds transferred so that the CRT would be funded properly, and realized that if this didn’t happen properly the client would be angry at me – even though none of this was truly my responsibility or fault. Nonetheless, I vowed to never put myself or my clients in that position again.
For your own sanity, and the sake of your client families, start planning now. Get things done well in advance of year end. Trusts don’t get drafted (well) when rushed. Complex gifts take time, thoughtfulness, planning, and meaningful conversations. Set a cutoff date for gift completion – December 15th or earlier is good. If you haven’t been working through the complexities and issues before then you probably shouldn’t do it. Certainly, there are exceptions – last minute windfalls happen, but they’re rare. With clients you’ve been in discussion with, set reasonable expectations and be firm. Procrastination is a norm, especially if gifts are complex from an asset or implementation perspective.
It’s quite likely that your clients haven’t been through this before and that you have. Time to be a leader of the process. Timelines, steps and process are important. One missed step and it’s next year already.
While I promote and discuss planned gifts constantly, I don’t promote haste, pressure, and haphazardness. If you haven’t started discussing the “big” gift and the multiple step process with your clients, start now. You have enough time but you don’t have much extra. To paraphrase the Chinese “the best time to plant a tree is yesterday.” Start now.