Tags: asset management | client education | estate planning

The fallout from the mortgage crisis is affecting inheritors in unexpected ways. Heirs may find themselves owning a house worth less than its financed value. They also may find themselves facing credit and other types of debt still owed by their now deceased family member. Personal debt is generally thought of as disappearing with the death of the borrower. But the type of debt and state laws can change that.

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Tags: charitable giving

As a rollercoaster year winds down, it's good to hear that philanthropic plans are still going full speed ahead.

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Schwab Charitable says contributions to its donor-advised fund are up 76% this year. 

Wealthy families haven't stopped giving.

Whether that's a leading economic indicator or just a sign that long-term tax planning is still on course, it's a great sign of confidence.

And it means that the philanthropic conversation still has to happen. The tax outlook is cloudier than ever, so every bit of clarity you can get for your clients counts even more.

Tags: charitable giving

GiveSmart is introducing a donor decision tool to help philanthropists decide which organizations they should support. The tool could help financial advisors who work with individuals who are charitably inclined.

If you're a private wealth advisor, please join Advisors4Advisors (A4A) to get its full benefits.

Register now, and we will donate $20 of our $60 membership fee to Bubbles The Clown’s financial literacy program, and you can post an icon on your website saying you support Bubbles' 501(c)3 charitable organization.

Plus, get other membership benefits, including:

Analysis daily of issues affecting advisors Aggregation of news from dozens of sites targeting wealth managers Reviews by advisors of practice management applications 30 independent experts blogging on advisor business issues 24/7 access to webinars with 50 hours of CFP® CE and 100 hours of IMCA CE Register Now

The tool for donors helps philanthropists at all levels, with flexibility on how deep they want to go in assessing potential grantees.

The Donor Decision Tool poses 10 questions. Donors then receive a customized set of materials designed to help them navigate the process of selecting a grantee.  Questions addressed include:

• Where do I start when learning more about a nonprofit?
• How can I analyze a potential grantee’s financial situation?
• When is it appropriate to request an in-person meeting with a nonprofit leader, and what questions should I ask?

GiveSmart.org collects and shares effective practices, including case studies, practical how-to guides, and tools. The website is part of a three-year grant from the Bill & Melinda Gates Foundation.

A good estate plan does not end at an artfully drafted set of documents. And it doesn’t end when all of the assets are transferred to the proper trusts. Unfortunately many estate planners are content to believe that their job is done when the ink is dry on the signature pages.

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The real work begins in the education of the family and the heirs as to what everything means and how it all works. Confusion and ignorance can unravel the best of estate plans and damage family relationships at the same time. When a parent dies without informing children of their roles, responsibilities and rights much can go wrong and often does. Planners can help by taking leadership and providing education guidance and understanding. It can make all of the difference in the world to a family lost in the arcane language and rules of estate planning.

Recently, a good friend of mine lost her father after a protracted illness. Fortunately there was good trust planning in place and what assets remained were protected from loss. However, the six heirs had no idea how to handle the many tasks and decisions left to them. It wasn’t their fault. It just wasn’t their expertise and no one had taught them. The estate wasn’t large enough to warrant a large legal bill and two of the siblings were attorneys already (litigators, but who cares).

Some of the mistakes they made were dangerous: renting out their dad’s condo to a friend but not purchasing a landlord’s policy; driving his car well after they should have notified the insurance company that he had passed away. Small things but still enough that could cause major liabilities and expose all of the estate assets to risk.

Worse yet, though, is that there was no way for the heirs to reach consensus about major matters. Half of the children wanted to sell dad’s condo and half wanted to keep it as a rental property. Half want to keep the investment portfolio, a few need the cash. Now what?

No advisor had taken the time to teach the family a system by which they could work through these issues. Absent that training, there is a family in disarray. At a very emotional point in life feelings are heightened and reasoning impaired and no one has the skills to fall back on which would allow them to resolve relatively simple matters.

We estate planners need to do better. Families need our help and they need it before they’re in the middle of the problem. Take the time to teach and train and mentor. Preventing these messes is much easier than trying to repair them after the fact.