Leaving a lasting legacyIncluding a charitable donation in your will can have benefits for you as well as the organization

Robert F. Garrett III stands by the new entrance to Shore Medical Center in Somers Point. The Ocean City attorney has included the medical center in his will. Half of the private donations for the new buildings are from planned giving through wills.

Robert F. Garrett practices what he preaches.

The attorney, who specializes in wills and estates in his Ocean City office, would like to see more people make donations to Shore Medical Center through estate planning. As the chair of the Somers Point medical center's Planned Giving Committee, he educates people about options for legacy giving.

He and wife Mary, who live in Beesley's Point, have already given a substantial donation to the hospital from their own estate. The sum, which he prefers to keep private, has been transferred to a trust. It will stay there in an account that pays him five percent interest until he and his wife die, at which point the hospital receives the full amount.

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"I get the charitable writeoff, and I get the income from it," Garrett, 74, said of advantages to him of what is called a charitable remainder trust. Rules for charitable trusts are set by the Internal Revenue Service, Garrett said.

Such arrangements are hugely important to the hospital.

Half of all private giving to the hospital over the past 20 years has been legacy giving, or donations related to an estate, said Shore Memorial Health Foundation Executive Director William D. Elliott, the fundraising arm of the medical center. "It's an area of giving most people don't think about. Most people equate giving with special events."

The most common type of legacy or planned gift is an outright bequest in a will after death, but arrangements like Garrett's - that start while the donor is still alive - are also popular, Elliott said.

Fundraising professionals would like to see such gifts become more commonplace, but first they need to encourage more people to make wills. National surveys estimate more than half of all adults in the U.S. do not have a will. As the greatest generation dies, the country is in the midst of the largest transfer of wealth in the nation's history, Elliott said.

"We have a saying. 'Where there's a will'," Elliot said, with a smile, "we want to be in it."

Helping to plan

Legacy giving gives organizations income they can plan on, said Charles Biscieglia, of Egg Harbor Township, the former CEO of South Jersey Industries, past president of the board of United Way of Atlantic County, and current board member at Shore Medical Center. It helps nonprofits get through recessions when other types of giving fall.

"It's good to go out and have annual campaigns," Biscieglia said, in which many charities are competing for the same dollars. "But you have to be able to sustain the organization and plan for the future. A campaign every year (alone) doesn't do it."

He and wife Susan have already given a gift of stock to the United Way, Biscieglia said. The donated stock was sold, and the proceeds put into an investment portfolio for United Way. The investment pays Biscieglia the interest it makes. When he and his wife die, "United Way has the money there. It's theirs," he said.

Biscieglia said he and Susan have also included Arc of Atlantic County and Gilda's Club South Jersey as beneficiaries in their wills. Some people make charities the beneficiaries of a life insurance policy, he said.

The planned giving is in addition to donations the Biscieglias make year-to-year. "We support a number of organizations. We try to move around. Every organization is in need," he said. "Everybody is hurting right now."

Biscieglia said it's important to keep your family and other heirs informed about your plans.

"Early on we sat down with our attorney and our two sons, who are beneficiaries and co-executors. Did I ask them for permission? No," he said of his sons. "It wasn't anything they were against. They knew of my involvement and my wife's involvement for years. One of my sons is heavily involved with United Way."

If you inform your heirs before you die, it prevents problems later on, Biscieglia said.

"One thing you don't want to have happen, is when you pass someone in the family starts opposing the will," he said. "All of (my arrangements) were done by financial advisers, which I'd advise, and my estate attorney."

Informing family

Craig Mally, 55, of Santa Barbara, Calif., helped his parents, Stuart and Annette Mally, donate a Somers Point medical office building to Shore Medical Center years ago. Stuart Mally was a local physician who died in 2008, and Annette lives in Atlantic City and Florida, said Craig Mally, a retired business money manager and financial consultant.

His parents donated the building but retained an income stream from interest on the value, which the hospital paid from rental income for an agreed upon number of years, Mally said. That period ended recently.

"It worked out very well from the family's perspective," Craig Mally said. "My father ... felt an allegiance to the hospital. He wanted to make sure it ended up in some way benefitting the hospital. "

Craig Mally said his parents could have sold the property, but since they weren't going to buy another one, there would have been capital gains to pay and other tax issues.

"The way it's structured, it served a good purpose for both sides," he said.

He stressed family members have to be educated about the benefits of legacy giving, and willing to discuss money matters openly. From his experience as a financial consultant, "The biggest problems arose when children had unreasonable expectations, and when relatives - even from the extended family, not direct descendents - feel entitled to something.

"You have to discuss these things," Mally said. "Make everyone part of the document, then everyone knows what to expect."

The biggest hurdle to legacy giving is lack of knowledge, said Biscieglia. Smaller organizations don't know it can be simple to set up planned giving programs, and potential donors don't know enough about the options and tax benefits. He recommends charities hold meetings to educate board members, then the community in general.

"Then follow up and start approaching individuals after that," Biscieglia said. If they have been educated, "they don't get insulted or offended."

He's been on the Shore Medical Center board of directors for 11 years, and was the co-chair of a capital campaign in 2003-04, in which $10 million was raised. The most recent campaign, held after education sessions on legacy giving, just ended after raising $20 million for hospital expansion.

Elliott said about $4 million of that came from legacy giving.

"I have to say from the results of that capital campaign at Shore, it shows there is a positive result," Biscieglia said.

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