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Few Affluent Americans Plan on Leaving Estate to Charity

WASHINGTON (AFP eWire - Aug. 22, 2003) - Most affluent Americans aren't planning on leaving their estate to nonprofits, a new poll shows.

Only 10 percent of affluent Americans age 45 and older said they were very or extremely likely to leave a part or all of their estate to charities, universities or other nonprofits, according to a poll commissioned by Charles Schwab & Co.

Fifty-six percent were not at all likely to leave any part of their estate to charity. Of those, 72 percent said they wanted to leave their estate to their children and beneficiaries instead. In addition, 21 percent said they don't trust that the money would be well spent if they left it to charity, and 12 percent said there are no nonprofits that they're interested in giving their estate to.

The poll also showed that many Americans have not yet made plans for their estate, calling in to question whether the projected $41 trillion wealth transfer of the Baby Boomers will happen as intended, according to the report. A 1999 report, Millionaires and the Millennium, from researchers at the Boston College Social Welfare Research Institute, estimated that $41 trillion in wealth would be transferred from one generation to the next over the next five decades, of which $6 trillion would be given to charity.

In the Schwab poll, 58 percent said they plan on leaving their children an inheritance, but 25 percent have not undergone estate planning yet. The answer was often simple procrastination: Of those without a plan, 66 percent said they intend to develop an estate plan but 'haven't gotten around to it yet.'

Ways nonprofits can educate supporters

There are several simple steps organizations can take to let their supporters know how important planned gifts such as bequests can be to a nonprofit. Rather than urging donors to begin their estate planning, nonprofits can simply remind people to consider them in their estate planning, said Richard D. Barrett, president of Barrett Planned Giving Inc. and a member of the AFP Washington, D.C. Metro Chapter.

Some people, even longtime donors, may not have considered leaving a donation to a nonprofit in the form of a bequest or other planned gift. Nonprofits can gently inform people of this option in many simple ways, Barrett said. Organizations can include in their newsletters to supporters stories about people who have done thoughtful planning, or they can add a line at the bottom of their stationery saying 'Please consider [name of organization] in your estate plan,' Barrett suggested.

'They're tweaking a thought in people's minds,' said Barrett, co-author of Planned Giving Essentials: A Step by Step Guide to Success. 'I think it's very effective. I think it's not effective to say 'you've got to have an estate plan and here's how you do it.''

But, I don't have much money

Many people in the Schwab poll said their estate was too small to think about an estate plan - even though the average net worth of those surveyed was $1.7 million.

Barrett cautioned that if people don't make an estate plan, the state will make one for them. Every state has different rules about how the money should be divided, and beneficiaries could be forced to deal with unexpected taxes. It doesn't matter if you believe you have only a small amount of money, Barrett said.

'A little bit of money makes a big difference (whether to your family or nonprofits),' Barrett said. 'It doesn't matter how much or how little a person's got?but, if you've got a plan (in mind), you'd better write it down.'

The Schwab web-based poll questioned more than 1,000 people age 45 and older whose household income was at least $100,000 or whose household net worth was at least $500,000. The poll was conducted in June, and results were released in July. For more information, visit the About Schwab pressroom.

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