BY ERIC GRODAN As another year comes to an end, amid shopping sprees, holiday celebrations and annual fund campaigns, the giving season heralds another timely opportunity: an ideal moment to review your estate plan. Particularly in light of the soon to be increasing federal estate exemption amounts, the time to act is before December 31. Literally overnight, on January 1, 2006, the portion of your estate that can be excluded from the estate tax will increase from $1.5 million to $2 million (per individual). If you, like many other business owners, believe that you’ve paid the government enough in taxes to last a lifetime and beyond, then you’ll want to take advantage of these new rules. Review Your Will: While increases in the estate tax exemption may not necessarily require you to make any changes to your estate planning documents, a professional review of your current will or living trust is in order to ensure the most effective transfer of your wealth. Your financial and philanthropic intentions may be thwarted by boilerplate trust language regarding the “then applicable federal estate tax rate,” or similar words to that effect. With the rising exemption, your spouse, domestic partner, family members, friends and designated charitable organizations could be shortchanged if you don’t revise your will or living trust. Moreover, as many estate plans consider gifts to charity when an estate exceeds the estate tax exemption threshold, such language could have the unintended consequence of providing a windfall to your heirs at the expense of your charitable intentions. Create a Will or Living Trust: If you do not have an estate plan, no time is better than the present to get your affairs in order. As recognized experts in the complexities of estate planning issues, the California Community Foundation can be called upon if you wish to include specific gifting language for charitable organizations. Contact our development staff at (213) 413-4130 or [email protected], and we can provide you and your attorney or financial adviser with appropriate bequest language for inclusion in your estate planning documents. Many Angelenos partner with the foundation because they know that, just as we are actively addressing some of the most pressing issues facing Los Angeles today, we will be here a century from now, addressing the issues that future Angelenos care about most. Any person who notifies the foundation of their intention to include us in their will or living trust is invited to join the Legacy Society. The Legacy Society provides a way for the foundation to thank those individuals who are leaving the foundation a gift through a will or trust, and assures that their gifts will not go unrecognized during their lifetimes. Some of the benefits of Legacy Society membership include invitations to special events, community recognition and appreciation, and a philanthropic legacy that will last forever. The California Community Foundation provides professional advisors, business owners, families, individuals and nonprofit organizations with objective, accurate and timely information to facilitate their planned and charitable gifts . However, estate planning is just one of the philanthropic services provided at the community foundation. To learn more, or to order publications, visit www.calfund.org, or call (213) 413-4130. Eric Grodan is Gift Planning Officer at the California Community Foundation. An attorney, he is the Secretary of the Los Angeles Estate Planning Council. Established in 1915 and located in Los Angeles, the California Community Foundation administers more than 1,300 charitable funds with a collective value exceeding $750 million.
