Preventive Law Alert - Unscrupulous CareGivers
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Preventative Law Alert for December 2008 Unscrupulous Caregivers
These Preventive Law Alerts are patterned after an annual publication to all
mountain climbers called "Accidents in North American Mountaineering" which writes up all mountaineering accidents
describing the accident, what caused it, how it may have been prevented so that further mountain climbing catastrophes may be avoided. The
Preventive Law Alerts are the equivalent of "Legal Accidents in North American Law" - a description of the legal
catastrophe and how it may be avoided using preventive law techniques.
The Legal
Catastrophe Your elderly parents have moved to a retirement community. Your dad dies soon
after, and your mother is finding her memory is not quite what it used to be. She has hired a sweet lady to live with and care for her
inside her home. You have a secure feeling she is being well cared for because the caregiver is so kind and friendly when you call to
inquire about your mother.
You did not know the caregiver was given a Power of Attorney by your mother, and that the
caregiver is helping herself to your mother's savings account. At the same time, the caregiver is confiscating the family heirlooms, which
she will later claim were given to her by your mother.
When stagecoaches went out of business in the southwest, the
stage-coach robbers were left without work. Most of them moved to retirement communities and became caregivers for the
elderly.
The Preventative Law Solution The following are our recommendations when you have a family member who lives alone and brings in another
person to help out:
Go through a licensed private fiduciary to
assist you in finding someone who has been checked out by the agency.
Be
sure your family member has an attorney who knows your family and who was instructed to watch out for your loved one.
Verify your family member has a certified public accountant (CPA) to handle all checks,
receipts, financial information and prepare tax returns. Chances are a CPA will notice anything unusual when they review these documents in
preparation of the tax return.
Make it a point for a family member to visit
your loved one at least once every quarter to make sure their mental and physical condition has not deteriorated, and to generally check the
living conditions.
Make sure your family member has not given a financial
or legal power of attorney to anyone without concurrence with the family attorney.
Call the caregiver for frequent reports.
Make sure your family attorney has received your aged family members legal documents to be sure they have the,
"Basic Legal Emergency Documents;" (1) Durable Medical Power of Attorney, (2) Durable Mental Health Care Power of
Attorney, (3) Durable Living Will, (4) HIPAA consents, (5) Durable General Power of Attorney, (6) Durable Funeral and Burial Instructions,
and (7) up-to-date Last Will and Testament with conservator and guardian provisions,so that you will be able to take care of them if a
medical emergency occurs. Having these up-to-date documents will prevent delays in taking care of your family member and prevent expensive
court proceedings.
If you do all these things, chances are you will catch a snake before it bites!
THE FIFTEEN NECESSARY ELEMENTS
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THE FIFTEEN NECESSARY ELEMENTS FOR A
CORPORATION TO HIT THE "BLACK" OF THE TARGET
Some years ago, when I was in the military service, I was fortunate enough to be
present when one of the leading pistol shooters in the United States gave a demonstration and an hour of instruction. He went through the
fifteen necessary elements for an excellent pistol marksman. I carefully wrote down those elements. The next time I shot the pistol, I went
through each of those elements and hit the "black" of the target on my first shot. Thereafter, I taught and coached the
leading pistol team in Europe and have used those elements to this day. Recently, I went shooting with a state police officer and
demonstrated these elements by shooting five so-called "hostage shots" — five rapid fire shots into the head of
a target 50 yards away.
What is interesting is
that people will shoot a pistol for their entire life and never shoot well if they do not know any of the following fifteen elements
— (1) shoot 8 rounds to establish a test shot pattern and correct sights with gunsmith on "Kentucky Windage;"
(2) assume the Tai Chi stance; (3) let the cat die; (4) press the web out; (5) extend the arm; (6) pull and push to balance; (7) keep your
thumbs up; (8) open the right eye; (9) focus on the sight, not the target; (10) breath to adjust vertically; (11) understand the arc of
movement; (12) take out the slack; (13) milk the cow slowly; (14) hold and follow through; and (15) call the shot. If any of these
fifteen elements are missed, the person will always be a "partially lousy" shot — no matter how much they try
and practice.
Interestingly, over the last 35
years as corporate attorneys, we have watched various corporations come and go, rise and fall, succeed and fail. Even though we are not
management consultants, we are like von Clausewitz or Sun Tzu who, although not famous conquering generals, were observers of generals and
able to write the elements of warfare. In the capacity of an active legal observer, we have identified fifteen necessary elements for a
corporation to hit the "black" of a target. When corporations miss any one of these fifteen elements, they will be doomed
to always being a "partially lousy" corporation — always beneath what they could be if they incorporated all
fifteen of these elements into their corporate practices.
We will describe each of the fifteen elements of a successful corporation briefly. Eventually, we will write a detailed
chapter in a book on Preventive Law for Business on each element. If you have questions on any one of these elements prior to our writing
about them in more detail, please contact us to discuss our observations and conclusions.
THE FIFTEEN NECESSARY
ELEMENTS
1. A Common Coordinated Vision of (a) what are
the future structures and activities, (b) what is likely to impede, (c) how to get around the obstacles, and (d) what is the scheduled
accomplishment action — all four implemented with a professionally-conducted brainstorm/think tank session.
2.
A Corporate Culture that describes in writing (a) the corporate name that matches the nature of the
business, (b) the symbolic logo, (c) the motto, (d) the mission, (e) the statement of values, and (f) the statement of character —
all publicized on the business premises.
3. A Written Plan for Success with (a) an
overall 5-year strategic plan, (b) a business plan, (c) a 1-year business plan, (d) a marketing plan, (e) a safety plan, and (f) a quality
plan. Every successful army must send scouts ahead to plan the route for the main body.
4. An Active, Complete, and
Competent Team of Outside Professional Advisors for (a) legal, (b) accounting, (c) life insurance, (d) property and
casualty insurance, (e) human resources or psychology, (f) management, (g) computers, and (h) investments.
5.
A 5-Year Projected Cash Flow Budget integrated into a computer program that will allow easy changes
and testing — a computer model.
6. An Employee Attitude Survey Conducted by an Objective Human
Resources Professional that not only measures employee attitude but also surveys their views on (a) what the
corporation is doing that it should not be doing, (b) what it is not doing that it should be doing, (c) ideas for improving the company, (d)
factors which create bad morale and suggestions on how to improve it, and (e) remarks they want to share with management.
7.
An Integrity Agreement and Confidentiality Agreement Signed by All Persons in the
Corporation and all persons dealing with the corporation. The Integrity Agreement will provide a
simple method of processing disputes and discomforts, using (a) oral and written communications, (b) negotiation, (c) mediation, and (d)
arbitration — forever preventing bitter fights and lawsuits. The Confidentiality Agreement will protect the
trade secrets and privacy of the corporation and its employees.
8. A Strong, Competent, and Functioning Board of
Directors with fiduciary directors or advisory directors from outside the corporation to prevent inbreeding of ideas and
to provide a check and balance on the management team with an Executive Committee of three or five directors to function between
meetings.
9. A Management Team with a Trained and Experienced Person for Each
of the Functions of (a) chief executive officer, (b) chief operations officer, (c) chief financial officer or
comptroller, (d) sales and marketing manager, (e) personnel and administrative manager, and (f) production or purchasing manager. In smaller
corporations, these functions may be merged with a single individual handling more than one function.
10.
Current and Continuous Client Contacts with a system for having the members of the directors and
management team confer periodically and regularly with the customers/clients and suppliers to determine (a) what they want from the
corporation and whether they are getting it, (b) what the corporation is doing that it should not be doing, (c) what it is not doing that it
should be doing, and (d) what ideas they have for a more win-win long-term company/customer relationship.
11.
A Vivid, Written Statement of What Is Unique and Compelling about the Goods or Services the Corporation Is
Selling with an image statement of what is unique about the corporation such as (a) services, (b) products, (c) the
place of business, (d) the customer, (e) the personnel, (f) the price, and (g) the marketing methods that clearly define the
company's market niche.
12. A Schedule of Regular, Effective Meetings
— weekly, monthly, and annually — for communicating what is necessary to and from the personnel of the corporation to
establish the "regular breathing" of the corporation and to "oil and grease" its
functioning.
13. A Method to Inspect What You Expect
— Management Information Systems that provide numbers to the corporate shareholders, directors, and management team with all the
"critical success factors," thereby providing all with an "instrument panel" for the corporate
airplane.
14. Job Descriptions for Each Employee keyed
into a large, readable organization chart that shows job titles for each position with the name of each person for each position and the
name of the "backup" for each position. The job description for each position will include (a) the title of the position;
(b) who supervises; (c) who is supervised; (d) the positions for which they are backup; (e) the area of the building for which they are
responsible and the property for which they are responsible; (f) the mission of the position; (g) the functions for which they are
responsible and accompanying standards; (h) the daily, weekly, monthly, and periodic mandatory tasks; (i) the skills they must have; (j) and
the skills you would like for the position and the improvement objectives for the current year.
15. Fair Compensation,
Incentives, and Ownership from Every Employee — Every corporation not only must calculate the "going
rate" of compensation for every job in the corporation but also must pay this compensation so that it does not expose good
employees to pirating from the outside. The corporation also must calculate the break even gross sales amount and use a percentage of the
surplus above that break even amount to provide incentives for management and administrative employees who are not already receiving sales
commission incentives, production incentives, or profit center incentives. Recent management studies have demonstrated that, if management
and employees own stock in the corporation, the chances of corporation success are increased manyfold.
O O O
The quality of American corporations will determine the quality of the survival of the
United States in the economic war during the next decade. It is important for every one of our corporations to incorporate these fifteen
necessary elements into its structures and share with the rest of us the knowledge they obtain when implementing these systems into its
corporate structures.
Disclaimer
The
contents of this memorandum is general in nature and is meant to be used for informational purposes only. Due to possible changes in the law
and its interpretation as well as the uniqueness of each individual’s situation, this memorandum should not be relied upon as an
expression of legal advice. Before any action is taken by the reader, it is imperative that legal counsel or professional advisors be
consulted.
FAMILY FORTRESS DYNASTY TRUST
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1. What Is a Family Fortress Dynasty
Trust? The six generational Family Fortress
Dynasty Trust ("FFDT") is an irrevocable trust, similar to the previously-used "irrevocable life
insurance" trust, that has additional provisions which enhance the benefits to the family. The FFDT is a receptacle for family
assets and life insurance. It sets up a family in a structure that will provide income and emergency funds for the members of the family for
five generations, possibly six if grandparents are alive. A revocable trust also may be structured to become a FFDT after both grantor
spouses die.
2. An Ideal Receptacle for Life
Insurance. The FFDT is an ideal receptacle
for all of the life insurance on the lives of the husband and wife, the children of the family, and, in some instances, on the lives of the
grandchildren. The FFDT protects the life insurance so that it is available to take care of the family and to provide last-to-die insurance
for paying estate taxes. The life insurance placed in the trust includes insurance on the breadwinner parents, stay-at-home grantor,
children, grantor's parents, grandchildren, and key persons.
3.
Other Assets That May Be Placed in an FFDT. In addition to life insurance, other assets that may be placed in the FFDT
include:
Stocks, bonds, and other securities portfolio
Limited partnership and limited liability company ownership
percentages
Family
corporation stocks
Household goods and personal effects of grantors
Real estate rentals that are not in the family limited
partnership
Furniture,
equipment, and other personal property rentals
Second homes
Secured loans receivable
4. A Source of Emergency
Funds. The FFDT provides emergency funds not only for the husband and wife who set up the trust but also for the
children, grandchildren, great-grandchildren, great-great-grandchildren, and, in some instances, the grandparents if they are still alive.
Most of the time, these emergency funds are transferred out in the form of loans. These loans are secured by the property of the borrower,
resulting in a "creditor screen" on the borrower's assets that protects them from having their property taken away by
outside "predator" creditors. For example, loans may be made from the FFDT to family members to increase the liens on
their residences so that the $100,000 homestead exemption will
fully protect their residence from being taken away by predator creditors.
5.
A Stash of Retirement Funds. The FFDT may be used to provide retirement funds for the husband and wife who created the trust, the grandparents, the
children, or grandchildren. Funds may be disbursed either as loans or distributions, depending on the relationship of each person to the
trust. What is advantageous about the distributions of FFDT funds for retirement is that these distributions, if made in the form of loans,
will not subject the recipient of the cash to income taxes.
6. Protection from Wipe-Out
Situations Through Six Generations. The FFDT provides protection for six generations — the generation of the
husband and wife who set up the trust, their parents, their children, their grandchildren, their great-grandchildren, and their
great-great-grandchildren. The assets in the trust are subject to distribution when the grandchildren die. The grandchildren then will have
raised the next generation and will be the grandparents of the following generations. During the years that the trust is in existence, the
trustees may release funds to the various recipients so that they may set up identical trusts to benefit later generations, assuming of
course that the tax laws remain the same. The FFDT provides the following
advantages:
6.1 Protection from Predator Creditors.
Currently, many people are exposed to unfair creditors which we call "predator creditors." For example, suppose you buy a
house. If the property had been used previously for a gasoline station with an underground fuel tank, you could be held liable for hundreds
of thousands of dollars to clean up the toxic substances. Suppose you buy a building that secures a bank loan. If the building becomes worth
less than the bank loan (an upside-down situation), you could end up with a foreclosure and a deficiency judgment to the bank. Suppose you
are a doctor, lawyer, dentist, architect, or other professional. If you allegedly make a mistake, you could end up with a malpractice
judgment against you. In conventional circumstances, a predator creditor could wipe out most of your hard earned assets and decades of labor
in accumulating those assets by you and your family. In such instances, you may find yourself being a "do-it-yourself"
insurance company to insure the rest of the world from unfortunate mistakes or bad luck.
6.2
Security from Divorce Claims. No matter how hard you try, the potential exists that the property which
you inherited from your parents or which you give your children may end up in a divorce court where the in-law makes a claim on the family
property. If you keep your assets in the FFDT, the assets will remain the separate property of the family member and will not be subject to
a divorce claim.
6.3 No Exposure to Humongous Medical Bills. In
today's world, escalating medical bills can wipe out a family's estate. The assets of the FFDT, however, are not subject to those medical
bills. The ill family member will be allowed to qualify for federal and state aid like everyone else. The funds in the FFDT are available as
extra funds to make the family member more comfortable during the disastrous medical
calamity.
6.4 Avoidance of Probate Expenses. All of the
assets in the FFDT, regardless of the generation, are not subject to probate either on the death or the incompetence of the family member.
Avoiding probate eliminates the necessity of appointing a personal representative, executor, administrator, conservator, or guardian
— all of which creates tremendous expense for the family.
6.5 Protection for the Dead
Branch of the Family Tree. Possibly, one or more children of the family will not have children of their own. Rather than
have the inheritance go to that child and end up in the hands of an in-law, it is recirculated within the FFDT to the other branches of the
family tree down to the great-grandchildren and great-great-grandchildren of those family members who have issue to carry on the family
name, traditions, and bloodlines.
6.6 Protection Against "Bedroom
Blackmail". "Bedroom Blackmail" is a name used to describe the situation where one of the
in-laws refuses to go to bed with the family member unless the family member takes money out of the family trust and uses it for some
special project of the in-law. The FFDT, however, is set up so that the family member subject to bedroom blackmail is protected because that
family member must go to other family member co-trustees for permission. The blame for the refusal is tagged on someone other than the
family member being subjected to bedroom blackmail. Consequently, the family member will not receive the blame and can live an ordinary,
happy married life.
6.7 Reduction of Estate Taxes. When loans are
made from the FFDT to family members, the loans become debts of the respective family members' estates and thereby reduce the potential
estate taxes of that family member. The liens created by these loans are called "creditor screens." The collateral for the
loans could be interests in family corporations, partnerships, real estate, and/or residences. The loans and the liens securing those loans
put the FFDT in first position so that the asset is protected against predator creditors. To the extent that various family members pay
interest on those loans, the interest payments further reduce the future estate taxes of the various family
members.
6.8 Reduction of Need to Use Commercial Financial
Institutions. The FFDT essentially becomes a family "bank" either with the investments that were
placed in the trust or with the proceeds from the life insurance that was placed in the trust. The family bank is available to lend money to
the family businesses, secured with collateral, and to give the family the benefit of (1) providing the funds the family needs, like a bank;
and (2) enjoying the high interest rates of a comparable bank loan.
6.9 Avoidance of
Unscrupulous Landlords. To the extent that property has been placed in the FFDT, the trust acts as a landlord, leasing
property to the various family members and to their businesses. As a landlord, the FFDT protects the leased property from the creditors of
the various family members and is always available to provide living quarters and business opportunities for family
members.
6.10 Reduction of Family Unemployment. The FFDT
may own the controlling interests in the businesses of the family. In such situations, the family businesses are protected from the
creditors of all the family members. At the same time, the FFDT provides employment and business continuity as a controlling owner of the
family businesses.
6.11 Reduction of High Income Taxes. The FFDT
is set up with a mechanism of breaking down into small sub-trusts, each with its own tax number. The sub-trusts result in the breaking up of
income within the trust into small units with lower tax rates and further allow distributing income from the trust to multiple beneficiaries
who themselves may be in lower tax brackets. Income taxation also may be diverted back to the grantor allowing the grantor to pay income
taxes for the trust and thereby further reduce estate taxes.
6.12 Tax Inflexibility.
The trust may be set up with family members as co-trustees. If further restrictions or careful discretion is needed, professional bank
employees or financially astute, competent persons can be added as additional co-trustees to increase the "gene pool" of
careful thinkers managing the FFDT. Depending on the situation of each family member who is a beneficiary of the trust, these trustees have
infinite flexibility to open the drawbridges of the castle and let income or property out or to keep it
in.
6.13 Methods of Keeping the Trust from Going
Astray. If the actions of a trustee warrants the removal of the trustee, the trust permits a
"Protector" to remove the trustee without court proceedings. If the tax laws change or if assets are imperiled, the
"Protector" may shift the jurisdiction or change provisions of the trust subject to careful checks and balances. Normally,
the attorney drawing up the trust is the "Protector" because that person knows the most about the overall estate plan and
the purposes of the trust. The family CPA, however, may be set up as a Co-Protector when the CPA is very close to the family. Religious
persons whom the family trusts also may be set up as Co-Protectors with the attorney to provide adequate checks and balances. In any event,
before the single Protector or the Co-Protectors act, they must obtain the approval of one or several family members who are designated in
the trust so that there is little chance for abuse by the Protector. Essentially, the trust is set up like the United States government with
various checks and balances so that none of the trustees, beneficiaries, or Protectors may go astray without being restricted by other
officials involved with the trust. The mere fact that checks and balances exist will in all probability prevent aberrant conduct by anyone
concerned with the trust.
6.14 Privacy from Persons Outside the
Family. If the family wants privacy, they may designate family members solely as trustees. The family need not involve
outsiders in the trust or designate outsiders as trustees. Since the trust is not involved in probate, it remains very confidential with few
people ever knowing the terms of the trust.
7. We Must Act Now — Congress May
Take Away the Lifetime Estate Tax Exemption. Normally, the FFDT contains both investments and life insurance. Throughout
the next year, as the politicians in Washington, D.C., contemplate taking away the $600,000 estate tax exemption, sophisticated individuals
will be making lifetime gifts of at least $400,000 per person and possibly the full $600,000 so that they may fund the trust with their
lifetime estate tax exemptions while they are still available.
This lifetime exemption enables the so-called "balanced aquarium arrangement"
— where there is enough income or extra principal from the investments — to completely make the premium payments on
whatever life insurance is in the trust. In other words, no further "fish food" need be placed in the trust tank to feed
the life insurance fish. The family may, in essence, forget about the trust and forget about making any further transfers to the trust and
watch the cash value of the life insurance grow and grow.
8. Losses Due to Inflexible
Investments. Some of the assets of the FFDT
are invested in life insurance, and some of the assets are invested in other assets. By comparing the tax-free return on investment within
the life insurance to the after-tax increases in the other investments outside the life insurance trust, the trustees may determine which
class of investment achieves the greater after-inflation, after-tax return on investment. If the trustees determine that it is better to
have the investments within life insurance policies, funds may be transferred into the life insurance policy as additional premiums. Their
growth will be sheltered tax-free. On the other hand, if the trustees find that the other investments outside the life insurance policies
are making more than the sheltered increases and the cash value within the life insurance, then the trustees may borrow out funds from the
life insurance policies and invest them in other investments. The FFDT trustees possess a great deal of flexibility to ride the waves of
changing economics.
9. How to Deal with the Income Tax Transference to
Parents. To the extent that the income within the trust is used to pay the life insurance premiums on the parents of the
beneficiaries, the income taxes on those funds are charged to the parents. Normally, one would consider this income tax transference as
being bad. Actually, it is good because it is, in effect, a phantom estate tax reduction. When the parents pay the income taxes of the FFDT,
the income tax payments reduce the size of the parents' estate. For example, if their estate is within a 55% estate tax bracket, the
government essentially pays 55% of the income tax payment in the form of reduced estate taxes!
10.
Advantages from Reducing the Expense of Property and Casualty Insurance, Liability Insurance, Medical Insurance, and
Disability Insurance. To the extent that the
trustees confirm that cash monies are readily available, either within the cash values of the life insurance or the other investments of the
FFDT, the family may reduce the costs of their medical, disability, property and casualty, and liability
insurance.
Since the cash values within the FFDT are readily available for emergencies, the waiting periods and the deductibles on the
other insurance policies may be increased when the family "self-insures" more. The self-insurance portion is backed up by
the cash available in the FFDT. To that extent, the out-of-pocket costs of the insurance coverages outside the FFDT are
reduced.
For example, when
the deductibles on the property and casualty insurance policy on the house and personal property are increased to $10,000 a year, the cost
of the insurance goes down considerably. To the extent that the lower premiums on these policies results in savings, the funds that
otherwise would have been "dumped in the river" and never seen again may be used to further fund the
FFDT.
When the family knows
that they have high insurance deductibles and that they will have to pay out of their own pockets, they tend to be much more careful in
preventing accidents. In fact, family members are more inclined to use some of the money saved to hire safety inspectors and engineers to
double-check and prevent losses.
Another benefit that this arrangement provides is that the family makes fewer claims on the insurance companies because of
the large portion self-insured. This arrangement not only encourages family members to compile an excellent record of no claims with all of
the insurance companies but also enables the family to get optimum rates on the various insurance policies. Imagine, the money that would
have been paid out to these insurance companies is invested and reinvested within the FFDT with the earnings compounding again and again for
the benefit of the family over the years.
I was amazed one time when I saw a computer projection of the savings created for a family over a period of many years. It is
hard to comprehend how large a family benefit is created by this arrangement until we have someone project the compounding effect of the
monies saved and invested rather than expended for premiums.
*
* *
Whenever there is a favorable tax savings structure or move, it is our policy to "move an
armored division through the tax loophole" as soon as possible so that the structure or move is grandfathered before the laws are
changed. With the FFDT, we follow and use the normal exemptions, deductions, and other tax laws that were set up as social legislation by
Congress to bring about various benefits to our society. In this instance, the FFDT is insuring that the family unit will be financially
strong for many generations.
If we recognize the principle that our nation is a collection of families, then the more families that are strong and secure,
the stronger the entire nation will be. Those families which do not use the vehicle of the six generational Family Fortress Dynasty Trust
will be subject to substantial losses and be weakened in later generations.
Imagine how strong, solid, and long-lasting our culture would be if every family had a
Family Fortress Dynasty Trust and built it up either with gifts of investments or with life insurance. Our whole nation would be an
economically strong fortress with the assurance of multi-generational prosperity.
Disclaimer
The content of this memorandum is general in nature and is meant to be used for informational
purposes only. Due to possible changes in the law and its interpretation as well as the uniqueness of each individual’s situation,
this memorandum should not be relied upon as an expression of legal advice. Before any action is taken by the reader, it is imperative that
legal counsel or professional advisors be consulted.
How to start your own Family Foundation
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Conventional wisdom tells us that only the super rich may play the game of gifting to charities to save
taxes.
"These games are played only by the Rockefellers, the Kennedys, the Fords,
and the Mellons, not by people like me."
Not so. With the advent of the "Community Foundations," which are
like the "Community Chests" we see on our Monopoly® game boards, even the wage earner may
save many tax dollars by gifting to his own Family Foundation set up as an integrated charitable fund within the Community
Foundation.
A Community Foundation, such as the American Community Foundation, the Arizona Community Foundation, or a community
foundation in your own city, allows a family or a corporation to set up a special charity fund within the Community Foundation. This
charitable fund is earmarked with the name of your family, the name of a deceased family member that you want to remember, or a name of your
choice. This becomes your own "Mini Rockefeller Foundation."
Your Family Foundation is
kept separate from all other funds, including the general funds of the Community Foundation, and is treated with all the benefits of a
Public Foundation.
You or someone you designate retains a say so as to which charities will receive the income of the fund and how the funds
are invested. The Rockefeller family has some substantial say as to which schools, churches, and charities receive income from the
Rockefeller Foundation. You, your family, and your designated "charitable advisors" have a say as to which charities are
given the income in your Family Foundation.
Imagine setting up your own Family Foundation which will give money in the name of
your family every year henceforth in perpetuity to the charities that you designate. Doing so helps ensure that those charities, schools,
and churches will be there to serve the world of your children, grandchildren, and your descendants forever.
Imagine, also, if thousands
of people in your community all set up these endowment funds to help your community be a better place with money to care for schools,
churches, parks, hospitals, medical research, and ecology. It is like funding a war chest to forever fight for what is
good.
With thousands of diverse family funds within the Community Foundation and thousands of separate, independent, and
free-thinking "charitable advisors" having some say so as to where the money goes, we will be assured that all the little
and necessary charities are taken care of and are not lost in the power politics of a busy board of directors of the large
foundations.
This is what we call the "butterfly wing" effect created by the Community Foundations with all their
separate family foundations, each casting separate beams of light toward different charities.
At the same time, your
mind’s eye is intrigued by (1) the thought of "perpetual prestige" for your family and its name, (2) the power
to help here and there where help is needed – like a fairy godmother, and (3) the vision of funding a better world for the future,
you have a pleasant feeling in your billfold.
And the icing on the cake – the gift to the charity saved income, capital
gains, and estate taxes for your family!
Sometimes when you give property instead of cash to your Family Foundation, you end up
with more cash in your pocket from tax savings than you had before the charitable gift.