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Spiderman, Stewardship and Estate Planning

You’ve probably heard it from the Spiderman movie, “With great power comes great responsibility.” It’s likely that this quote is more accurately attributed to Voltaire, rather than Ben in the Spiderman movie, but poor old Voltaire certainly isn’t going to get the credit he’s due in today’s media-filled world. Regardless, the basic truth about stewardship in this phrase remains the same: to whom much is given, much is required.

spiderman comic - responsibilityFrom an estate planning perspective, the pithy statements might be phrased more like this:  “With great wealth comes great opportunity and great responsibility.” Wealthy and even moderately wealthy families have a greater opportunity, if not a greater responsibility, to consider charitable giving as an integral part of their financial planning process, either now or in the future. At some point, there is a limit on the level of satisfaction and happiness that can be obtained through being wealthy. 

As it turns out, stewardship and philanthropy integrate well with family values, goals and morals, which will weave the family tapestry for current and future generations to come. Charitable giving can be a central aspect of preserving your family’s wealth and building character in the family for today and years to come. Here are a few ideas about how stewardship, philanthropy and charitable giving can impact the family system and estate planning.

1) Children learn stewardship from observing the actions of their parents and other family members.

Apart from the fantastic tax incentives and benefits invented by Congress and the Internal Revenue Service, there should be personal incentive, desire and satisfaction in sharing a part of your wealth with less-fortunate individuals and charitable organizations that attract your interest. Once an individual has purchased the expensive toys wealth can provide, and provided long-term financial security and comfort for him or herself; and their spouse, then attention must be turned to sharing excess wealth with children, other family members, and/or charitable endeavors. Children see and recognize when parents and siblings and other family members are demonstrating stewardship.

2) If you intend to benefit charities in your Will, it’s probably smart to find a way to do it while you are alive.

In doing so, you can derive joy and satisfaction from your gifts. Many wealthy individuals tend to postpone acts of charity until after the death of one or both spouses. On one hand, this may make sense to the extent that it is important to retain financial assets in order to assure long-term financial security and comfort. On the other hand, if elderly individuals focus only on living off the income from substantial investments, there may be a wasted opportunity to do both: enjoy a lifetime of financial security and to share with charitable organizations prior to death. Another opportunity to influence the next generation is by demonstrating the “joy” of giving.

3) Philanthropy is the glue that can bind generations of the family together.

It is often difficult to coordinate activities among several family units that span two or more generations. Usually, there is genuine love and affection within the larger family group. At the same time, it is difficult to identify a specific activity involving a broad cross-section of the family that can hold the interest or investment of time for both young and old alike. Administration of a family foundation or charitable trust, however, offers an excellent alternative for consideration in many families. The sharing and participation in charitable endeavors can be rewarding and satisfying for all the members of the family system. 

4) One is rich when he would rather give to charity than buy another expensive toy.
Ellen Frankenberg, a well-known family business psychologist, once coined the phrase "the joy-to-stuff ratio." At some point in time, wealthy families begin to receive less and less happiness and satisfaction from the accumulation of expensive toys and luxury. At some point, it is even possible for an excess of wealth to lead to negativity and depression, as some individuals learn from first-hand experience that money cannot buy happiness. Exploring the joy and satisfaction of charitable gifting must be considered an option when the emblems of wealthy living no longer provide a heartfelt peace of mind. A delightful hobby may be to see how much in tax deductions you can generate through a careful plan of charitable giving. Others will be content and happy to see the good works that can be accomplished through philanthropy, as opposed to conspicuous consumption.

Within the family system, the qualitative attributes of charitable gifting are perhaps more important than the quantitative factors. And at a minimum, philanthropy and charitable giving should be explored as a very attractive opportunity and option as a part of the overall financial and estate planning process.

Again, stewardship and philanthropy involve much more than only financial and monetary factors. Stewardship can play an integral role in developing healthy morals, values and goals for individual family members.  The impact can go well beyond the immediate family and best of all, demonstrating stewardship and philanthropy today will help ensure an enduring family legacy for generations to come. 

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