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Earlier this year, Hans and I were privileged to be at a small event hosted by the Upward Star Center in Spartanburg. Russ Crosson, Executive Vice-Chairman of the Board for Ron Blue Trust Company was the guest speaker. Our good friends, Hugh Brantley and Bobby McDonald, from the South Carolina Christian Foundation were kind enough to include us.
Ron Blue founded a biblically-based fiduciary investment firm in 1979, and Russ has been with the company in one capacity or another for that entire time. He has advised many ultra-high net worth clients and families during that time, including, notably, the Cathy family of Chick-fil-A fame. Russ is also a prolific author and even shared a few tidbits from an upcoming book, soon to be released. As Hans has written in previous blogs, he once worked for Chick-fil-A and personally met Truett Cathy on a few occasions, so he and Russ were able to enjoy memories of this great man.
When an opportunity to ask questions of someone such as Russ comes along, we are just thrilled to be able to learn from his experiences. Much of Russ’s presentation was geared towards estate planning and charitable giving, two subjects near and dear to our hearts at Intelligent Investing. Here are some lessons we learned from Russ Crosson.
Consider Giving out of Your Net Worth, Not Just Your Income
One startling observation he has made over the years is that charitable organizations are seldom included in a client’s estate planning documents. This was quite a revelation to me.
Russ also challenges his clients to make annual giving decisions not based on annual income alone, but to consider their net worth and give based on these “balance sheet” amounts. Often, high-net worth clients grow their net worth right up until death, for no particular reason. It is simply a life-long habitual behavior they cannot eschew. The old saying, “Do your giving while your living, so you’re knowing where it’s going…” comes to mind.
There is a joy in charitable giving. Why not enjoy seeing the wealth you’ve been entrusted improve others’ lives? Your family and favorite charities actually may need the money now, so why not give it now? Everyone needs a plan and can be more generous than they think. Absent a plan, we have no idea how generous we can be. When it comes to giving money to our children, either now or in our estate plan, Russ had some excellent advice.Absent a plan you have no idea how generous you can be. Click To Tweet
Giving To Your Children
Age is obviously an important consideration.
- From birth to age twenty we should simply protect them.
- From twenty to forty, we should watch them.
- Once they are over forty, we should give as our heart directs us.
Being overly generous to children when they are young can stifle what Russ calls their “drive to provide.” If you leave too much to your child, his or her spouse may feel inadequate to provide for the family…leading to potential and unintended marital conflict. In addition to blessing our children materially, we should provide spiritual and social capital, while sharpening our children’s unique natural talents that have been given to them.
Consider Treating Each Child Uniquely, Not Equally
Many clients with planned charitable giving strategies and estate plans have “equalization” language that essentially tries to treat each child equally and bless them financially with an equal inheritance. There are several points of view on this subject. One of my favorite sayings, I believe from Ron Blue, is that “treating your kids fairly doesn’t always mean treating them equally.” Our children are unique, and sometimes need to be treated uniquely. However, if children are treated unequally, they should know why, and it should never come as a surprise… especially after we are gone. Having said this, if we have a child who is a spendthrift or has addiction issues, it may be wise to leave that inheritance in a trust. If a child doesn’t have the skills to handle money, it would obviously be bad stewardship to ignore this situation.
Complex Charitable Giving Strategies
If you are interested in learning more about various charitable giving strategies, consider downloading our Charitable Giving article below.
We will be sharing more lessons learned from Russ Crosson in future blogs, so be sure to check back.