I’ll continue my series of blogs covering the common mistakes surrounding transferring wealth with Mistake #5, Transferring Without Heart. If you have not already done so, I invite you to read Mistake #1, Mistake #2, Mistake #3, and Mistake #4.
Mistake #5 – Transferring Without Heart
I’ve seen it over and over, wealth owners frantically writing $14,000 checks at the end of December, to as many family members as they can, to take advantage of the annual exclusion gift. They make sure those checks are in the mail before the deadline and take a deep breath knowing that possibly hundreds of thousands of dollars are no longer in their taxable estate. Ahhh…
On the other end of that gift exchange, beneficiaries receive the checks with a variety of responses, ranging from indifference and forgetting to cash the check, to confusion over what they’re supposed to do with the check, to glee over how they plan to utilize the proceeds.
Weeks later, the check writer is often a little disappointed that their gift was not acknowledged. If that transfer had been made with heart, the response is likely to be very different. What if each check was accompanied by a short note that said something along the lines of “how important the beneficiary was to them” and “how grateful the wealth holder is to be able to give a gift like this?” The note might also say that the intention is to make the beneficiary’s life a little easier, or to be used in a certain manner, or whatever the donor intends. It would also be appropriate for the note to include a little request that the beneficiary let the donor know how the funds are utilized. With a note like that, the beneficiary usually feels a connection with the gift and s/he will be inclined to acknowledge its receipt with gratitude.