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August includes it’s fair share of obscure “holidays” including National Catfish Month, Friendship Week, and Bad Poetry Day. This month is also your chance to celebrate National Make-A-Will Month! (Yes, seriously. This is a thing.) I recommend celebrating this quite literal month by creating an estate plan. A will is one of six key documents in a quality, individualized estate plan. (If you were to elect to make a living revocable trust a part of your plan, then you would still need a will—often referred to as a pour-over will—it would just read a little different!)

national make-a-will month

Depending on your personal/family situation and assets, a will can be a bit more complicated and longer in page length than the other estate plan documents. It’s important you work with a lawyer experienced in estate planning to be sure your will covers the three major questions of:

  1. Who do you want to be the executor of your will? The executor is in charge of carrying out your directions and wishes as expressed in the will. They will also pay any outstanding debts and distribute assets as you express in the document.
  2. Who do you want to be the legal guardians for your minor children until they’re adults (age 18), if something were happen to you?
  3. What do you want done with both your tangible and intangible property? (An example of tangible property is your books or your boat. Intangible property includes assets like stocks.)

Yet another reason to work with a professional estate planner to craft a will is to avoid costly mistakes and to legitimately donate to your favorite charities.

Why Does a Will Matter?

I cannot reinforce enough that everyone NEEDS a will. Leaving your family and friends without a clearly written will in place can result in worst case scenarios such as litigation or confusion in who is to be the proper guardian of your minor child(ren). Real world examples of this are unfortunately all too common and no one is immune. For instance, Prince died without a will leaving family infighting and conflict.

Without a will the Iowa probate court is forced to name an executor and there is the possibility that the appointed executor is not who you would have chosen. It’s simply better not to gamble with who has control over dispersing your hard earned assets.

Regular Revisions

If you already have a will (and other necessary estate planning documents) congrats! You’re better prepared for the inevitable than about half of Americans. Yet, just because you created an estate plan at one point doesn’t mean it automatically adapts to how your life changes.

While estate plans never expire, for your will to be most effective it needs to be reviewed at least annually and updated as needed. Common scenarios for estate plan revisions can be a death in the family, change in marriage status, birth of a child, major changes in financial situation, and moving out of state.

Your estate plan should also be updated if your goals change over time. For example, you may want to alter the amounts of inheritance or increase/decrease charitable bequests.

Where There’s a Will There’s a Way

I would love to help you solidify your family’s future, help you achieve peace of mind, and celebrate Make-A-Will Month in the best way you can! The best place to start is by filling out my Estate Plan Questionnaire. It’s easy, free, and there’s no obligation. It’s simply a document that gets you thinking and planning. You can also contact me at any time via email (Gordon@gordonfischerlawfirm.com) or phone 515-371-6077.

Giving Tuesday How Will You Get

Giving Tuesday is held the Tuesday after Thanksgiving (November 28 this year) and is an important day for nonprofits to reach out to current and potential donors. Scroll through your social media feeds with the hashtag #givingtuesday and it seems like every organization, from the Malala Fund to The Leukemia & Lymphoma Society, is running digital marketing campaigns related to the day. Unlike Black Friday’s lines outside of stores in the middle of the night, #GivingTuesday’s activity is largely social media based. For nonprofits all of this online activity is typically directed to online giving portals.

These online giving pages facilitate easy charitable giving, but before you send inspired donors to your giving portal, it’s wise to ensure your organization is compliant with associated legal issues. Whether you have created your own donation platform or are using a third-party platform embedded on your site, make sure to follow these legal tips:

Donation Receipt

It’s important to offer a donation receipt to your donors so they make take the charitable contribution deduction on 2017 taxes. A proper receipt—whether in a generated pdf, email, mailed letter, or other printed/printable form—should state the donor’s name, date of contribution, and amount given.

If the donation is greater than $250 a written statement should be obtained stating that the organization did not give any services or goods. If the charity does in fact give goods or services to the donor in return for a donation, the acknowledgment should describe what was given and provide an estimate of value of the goods or services.

If those goods and services provided are valued greater than $75, the written statement must also specify the the amount of the donation that is tax deductible. (This figure is the amount of money that exceeded the value of the goods or services exchanged by the charity.)

You want to make certain your communications (such as written acknowledgements and receipts) with donors meet all legal requirements, as just discussed. But that doesn’t mean you can’t also have some fun with these communications, or use them as an opportunity to stick out above the noise with creativity. Here are a couple solid articles, from The Balance and CauseVox  featuring ideas for upgrading your thank you’s to donors.

Online Charitable Solicitations

Fundraising activities fall under state law, and many states require charities (as well as individuals hired to assist the nonprofit with fundraising) to register with that state BEFORE any donations are solicited from residents of said state.

A charitable solicitation can be considered anything from a YouTube video with a call to action to donate, an e-newsletter sent to a subscriber list, to a simple Facebook post (and everything in between). Obviously, online giving has made figuring out which states your organization needs to register with complicated. Case in point, your organization may operate and be registered in Iowa, but if you have a “donate” button on your website, donations could come from residents of any state (or any country for that matter). Even the presence of a donation button could subject an organization to registration requirement in some states, but won’t in other states. (Charitable solicitation registration is not currently required in Iowa.)

The main policy guidance for state regulators on this matter was published in 2001 by the National Association of State Charity Officials (NASCO), called the Charleston Principles. But, these provisions aren’t law, merely suggestive, so how should your charity deal with online donations? It’s far better for the organization to be safe rather than found noncompliant which can involve costly penalties.

Initial Registration Requirements

Nonprofits accepting online donations have a two main approaches, according to the white paper, “Guidance for Compliance with State Charitable Solicitation Registration Requirements,” published by Harbor Compliance and the National Council for Nonprofits.

  1. Your charity could register (or file for an exemption) in all 41 states that require such registration, but that can be costly. The total fees to register your charity in all those states can range up to $5,000, (and that doesn’t even include professional fees you may need to incur, like paying lawyers or CPAs).
  2. A second option is to register only with states that require registration and from which you would reasonably expect donations. For instance, if your nonprofit operates in Iowa, depending on your fundraising activities, it could be reasonable to expect donations from residents of neighboring states such as Minnesota. Or, if a significant percentage of subscribers to your e-newsletter are from Illinois, it’s smart to register there. With this option it’s important to note that if you do receive a contribution from residents of another state that requires registration that triggers the need to register with that state.

Either way, it’s a good idea to look into the Unified Registration Statement (URS), a consolidated multi-state registration form. It’s also important to remember not only the initial registration, but also registration renewals (complete with deadlines and late fees).

Crowdfunding Considerations

Crowdfunding is anticipated to be a $90-96 billion dollar industry by 2025, and there are more and more nonprofits utilizing it as a tool within the fundraising mix. If your charity is using a crowdfunding site (Kickstarter and Indiegogo are both popular platforms) the charitable solicitation registration requirements covered above apply. But, this is also a good subject to broach the topic of fraud and misrepresentation because crowdfunding has opened the door to more people being involved. Charitable organizations are prohibited from engaging in fraud, using deceptive practices that are likely to create confusion, and misrepresenting the nature, purpose, or beneficiary of the charitable solicitation. This one’s a biggie because committing fraud or misrepresentation could mean a lengthy and expensive litigation process.

To avoid this risk it’s wise to have a vetted gift acceptance policy with clear guidelines regarding crowdfunding. Organizations should keep an eagle eye on fraudulent crowdfunding campaigns that may use the nonprofit as a beneficiary, but fail to ever actually donate funds. Yet, if dedicated volunteers and donors do want to crowdfund for you, that’s fantastic. The organization just needs to keep close watch on the campaign’s operation and offer crystal clear guidance on what campaigning on behalf of the charity is acceptable and what is not.

A day when the world comes together


#GivingTuesday is coming up quick (where did the year go?!), so now’s the time to double check any potential issues for noncompliance that could occur. If you have any questions with regard to your online donation compliance I would love to offer a free one-hour consultation. Contact me via email or on my cell phone (515-371-6077). Best of luck with your #GivingTuesday campaigns!

woman in front of painting

The headlines are abuzz with a new world record for any artwork sold at an auction or privately. Leonardo da Vinci’s painting, “Salvator Mundi,” sold for $450.3 million (including the auction house fees) at Christie’s in New York to a private buyer, after an intense 20 minutes of phone bidding.

Why such a high price when the piece definitely had a good deal of scrutiny around it? For instance, it was major part of an art scandal known as “The Bouvier Affair,” was central in a legal dispute, and had been heavily restored. Additionally, it’s authenticity is doubted by some experts as not a work by the grand master himself, but perhaps his studio. Nevertheless, the piece was executed around 1500 on a commission for King Louis XII of France, was lost for centuries, and was not publicly rediscovered until an estate sale in the U.S. in 2005 where the piece, thought to be a copy, was purchased by a group of buyers for just $10,000. It’s thought to be one of fewer than 20 paintings known to exist by da Vinci. “Christie’s called the work ‘the Last da Vinci,’ the only known painting by the Renaissance master still in a private collection (some 15 others are in museums).”

All of this art excitement brings up an interesting situation to consider: how do you incorporate your art collection into your estate plan? Sure, you likely don’t have an authentic da Vinci, Renoir, or Klimt just hanging in your living room, but maybe you have a couple pieces you inherited or a growing modern art collection.

Value of a Passion

For most collectors the art isn’t about monetary value, but more so about a passion for a certain period, artist, or medium. Collecting is often an act of genuine appreciation for the fine arts. Considering both the intrinsic and market value of your art collection it’s ESSENTIAL you include it as a part of your estate plan. The collection is, after all, a part of your total estate’s value and they way it’s handled in your estate plan could impact the value of your gross estate in regards to the federal estate tax. When it comes to the estate planning goal of avoiding such taxes and fees the appraised value of your art is paramount to consider. Naturally you want your collection to be well-treated following your passing, as well as retain its value.

Let’s go through some important steps and elements to consider.

Assemble Documentation

Value of the collection will be important to the estate plan. If you haven’t done so already, you must correctly catalog, photograph, insure, and appraise the collection. You should also gather all documentation such as appraisals and bills of sale that will need to accompany the artwork as it changes hands upon your estate plan’s execution.

Weigh Your Options

With an art collection there are three main options for disposition within your estate plan (or to be executed during your life).

Donate

Donating your art to a charitable organization or a museum is an excellent way to practice smart charitable giving. It can also be one of the more simple options. Donate through your estate plan following your death and the estate will receive a tax deduction based on the current valuation. Give while you’re living and you can take an income tax deduction, also based on the value of the piece or collection at the time of the donation.

With this options you and the recipient organization should agree to signed terms and conditions BEFORE the artwork delivery. Details can include specifics as to where and how the art is to be displayed, if you want your name on the signage next to the painting, and similar details.

museum art collection

Bequest Artwork to your Loved Ones

Another common option is to keep the art within the family by passing along the art along to your estate’s heirs. Yes, you could gift each individual piece to each family member, but if you want to keep the collection in tact you could transfer the collection to a trust you create while living that can be updated and changed during your lifetime. A trust is a solid estate planning tool that allows your named trust beneficiaries to avoid estate tax and probate complications and fees. In the formation of your trust you can also define the terms for care and condition of the artwork.

You could instead bequest the collection to an entity like an LLC you create. In this case your heirs would own interest in the LLC instead of each owning a piece of art. In your estate plan and in the development of the entity you can appoint a manager (or multiple managers) who make sales or purchasing decisions for the collection.

framed art collection

Sell

It goes without staying that art is expensive—to buy and to sell. There are benefits (and detriments) to this option during life and after death, but waiting to sell until after death means the art’s value will be included in the estate. As such the capital gains tax could be lessened or entirely eliminated because the tax basis for the art collection is increased to fair market value at the time of death, instead of what you paid for the art/collection. If you instead would like to sell while alive you can likely expect to pay a capital gains tax on top of a sales commission fee and sales tax (among other potential fees).

black and white art collection

Give, gift, sell—whatever option you choose, select a plan that allows you to feel at peace with where and to whom your collection is headed.

Enlist an Expert

Regardless of what option you want to pursue in the disposition of your art work, you need to work with an experienced estate planner who can help navigate the complexity of your estate. It’s your estate planning lawyer who can help you establish a framework for passing along your artwork to your chosen beneficiaries.

Discuss With Your Family

Depending on your family dynamic, discussing your estate plan with your loved ones can be difficult. It can bring up emotion and hard topics like mortality, however to avoid litigation, mitigate in-fighting, and to help determine what’s the best course of actions forward for your property it’s necessary. When it comes to your art collection, your heirs may not feel the same way about the artwork that you do and knowing these opinions is critical in the decision of what to do with the collection.

When having the conversation, cultivate an environment in which your family can discuss openly and freely without judgement. You want their honest opinions as a part of your decision in what to do with your collection in the event of your passing.

art graffiti


Just as the art itself can be exceedingly complex, so can incorporating said art into an estate plan. You probably have questions; don’t hesitate to reach out at any time via email or phone (515-371-6077). I offer a free one-hour consultation and would love to help you protect your artistic assets through quality, individualized estate planning.

Here’s the worst-case scenario: You’ve passed away and your family falls, expectedly or unexpectedly, into a tumultuous state. They all have different opinions on how your estate plan should be interpreted, and one or more beneficiaries want to contest the distributions. While everyone knows it’s all about the money, there are easily enough legal “hooks” on which to hang a lawsuit: it can be contested that there has been undue influence, document forgery, breach of fiduciary duty, or that the deceased testator was not of sound mind.

Photo by Priscilla Du Preez on Unsplash

Litigation over an estate plan is terrible for everyone involved. For the sake of your family’s well-being work now to avoid this problem in the future—I really cannot express this enough.

Three Best Ways to Avoid Litigation

  1. Have a plan. Having an estate plan that is carefully planned and well thought out, created by an experienced estate planner, and completed well in advance of any death or disability is the single best way to avoid litigation.
  2. Talk about it. It’s critically important to discuss your final wishes with your loved ones and beneficiaries. Clear the air now. Don’t leave it up for future interpretation.
  3. Include a clause that discourages litigation. An experienced estate planner can include a provision in your estate plan to shut out a beneficiary if s/he brings litigation. (This is also important why you need an actual lawyer to help craft your estate plan.)

I would love to discuss your individual estate plan needs; contact me via email at gordon@gordonfischerlawfirm.com or give me a call at 515-371-6077.