A Lasting Legacy

When Lucille Rader died in 2015 at age 92, she left a large portion of her estate to an eponymous foundation she’d created in 2000 to fund college scholarships for girls.

The Lucille Rader Education Foundation Scholarship Program was founded in memory of the Sisters of the Immaculate Heart of Mary, who devoted their lives to excellence in teaching. Rader, a former nun who left the religious order and married, taught at Immaculate Heart High School for girls in Hollywood and other schools. Scholarship candidates must be senior Catholic high school girls in good academic standing, with “good moral character” who have participated in team sports. The values that informed Rader’s life — Catholicism, education and team sports — moved her to create a lasting legacy with the wealth she and her husband had amassed in life.

“She left almost everything to the foundation when she passed away,” said Timur Berberoglu, a Santa Monica–based attorney and partner in Deering, Sands & Berberoglu who specializes in trusts, estate planning and litigation. “She created it while she was alive, and one of the board members was one of her former students. We had to get a conservatorship for her. When she died, we were able to sell her house in Pacific Palisades and put the funds into the scholarship.”

Making plans for what happens to one’s estate, or whatever is left over at the end of life, falls to the bottom of the to-do list for many of us. For some reason, it is a dreaded task. Even Aretha Franklin, who died last August with an estate reportedly valued at $80 million, never got to it. She died with no will. And she is hardly alone.

About 60 percent of adult Americans have no will or last testament, according AARP.org. That’s not surprising since it means pondering your own death. It requires planning. Gathering documents. Tedious record-keeping. But the alternative — your hard-earned savings going to probate court, where it goes before a judge who distributes it if there is no will — is a time-consuming process that can be even more dreadful. In order to control where your assets and funds go when you’re gone, you must put your desires in a will. Creating a legacy is a way to dedicate hard-won funds to a principle, value or mission that has lasting meaning, value and significance.

“My view of legacy is that you actually design legacy every day and it is a reflection of your values and who you are,” said Patrick Renn, a certified financial planner based in Atlanta and author of Finding Your Money’s Greater Purpose: How to Make your Legacy Count (Advantage; 2015). “Once you get past the stage of, do I have enough money and will it run out, then the question is, now what?”

If there are children, to what extent do you provide for them in your estate plan? That can be complicated, although most parents want to leave everything to their children, according to estate planners and financial planners interviewed for this story. But there are a number of parents who don’t want to give their children so much that they miss out on the gratification and sweat rewards of earning their own way in the world.

Similarly, Bill Gates and Warren Buffett, both of whom have pledged to give half of their estates to charity, have said they want their children to work for what they have. But some context is in order here: Gates and wife Melinda are reportedly giving $10 million to each of their three children (a paltry sum compared to their total wealth, but to most of us unimaginable riches), and Buffett is said to have funded a $2 billion foundation for each of his three children. Sting, however, has said that his six children won’t receive most of his fortune, reportedly calling it “albatrosses round their necks.”

Plenty of people feel the same way about money spoiling their children’s ambition, drive and values, according to  Pasadena attorney Ali Smyser, a certified specialist in estate planning, trust and probate law. “I do have a number of clients who are either self-made and they want to make sure their kids have a work ethic, or they have an experience with a peer who had a trust fund coming so did not do much,” said Smyser, a senior associate in the Donald P. Schweitzer law firm. “Or they just want their children to work for what they receive.”

People who do want to leave everything to their children can accomplish that in a number of ways, and Renn said that parents should look at each child individually and not necessarily give each child an equal share. For example, a well-to-do child who is a doctor should not receive the same inheritance as a child who is a divorced teacher with a special-needs child. Some children don’t need any help. Some parents decide to leave college funds in trusts for their grandchildren, but very little for their affluent children. Once people decide on what to do about their children and grandchildren or extended relatives, then charities and legacies can be considered.

Some clients have what Smyser calls a “philanthropic heart,” and she encourages them to carve out a legacy and use their estate planning to make their lives and legacies more significant. She said that in these tumultuous political times where civil rights have been under siege, she has clients who changed their wills to include funds to the ACLU and Planned Parenthood. “I make my clients aware of the possibility that if they would like to make a charitable gift, that now is the time,” she said. “Do they go to church, do they make regular gifts to a hospital or an animal rescue? Then I facilitate it.”

One client who inherited considerable funds from her parents and has no children set up a family foundation, Smyser said. Her parents then donated $1 million to the family foundation. She set up her own estate so that one third of it will go to fund the family foundation, which is dedicated to helping women and girls impacted by poverty and human trafficking. The Pasadena Community Foundation (PasadenaCF.org) helps many families establish and manage their charitable endowments.

But before anyone can consider creating a legacy or family foundation, Renn, the financial planner, said people have to figure out whether or not they have enough money to see them through to the end of their expected lifespan. After that, if  there are enough funds left after parents’ bequests to children or grandchildren, the balance can support a legacy inspired by values, principles and betterment of others.

“Typically, our clients are first-generation wealth, folks that did not come from well-heeled families, and they have some mileage on them,” he said. “They care about their church or school or hospital, or they feel some tie and they want to make life better for others.” The desire to improve things in their community is part of their DNA, he said.

One of Renn’s clients who’d never married and worked all her life was introduced by her parents’ friend to volunteering at the Salvation Army, a Christian human services nonprofit. When she died, she left everything to the Salvation Army — more than $1 million. “She had enough to live on, and she decided that other than a few requests from cousins and a couple of friends, she would leave everything to the Salvation Army,” he said. “She was a nice little lady, very self-sufficient and lived in a home by herself.”

Once an estate plan is drawn up or a will written, the task isn’t necessarily complete. It needs to be revisited again and again -— refreshed, if you will. That is because over time, elements in estate plans and wills change: Children grow up and guardians are no longer relevant. Money set-asides for the inheritance of a child who may now be an adult with a drug, alcohol or gambling problem, may warrant a change. Ongoing legacy donations can be impacted by tax law changes. And every two years, when Congress convenes, laws change. Many financial planners, some estate-plan attorneys and certified public accountants will calculate the impact of new tax laws on tax returns and estate taxes. So you’ll probably have to update your will and estate plan.

“We don’t want any surprises,” said Renn. “We hate surprises.”