Charitable contributions in divorce: not just for rich and famous

By Andrew Zashin*

Navigating the divorce process is often both emotionally and financially challenging. As part of the process, couples must divide their assets. While this often involves extensive legal and financial negotiations, and potentially even court involvement, there exists one option in structuring a property division that can yield positive results that benefit both the parties and their communities: charitable contributions.

The media often portrays charitable contributions made in connection with a divorce as an avenue only available to the rich and famous. I previously discussed how, as part of their 2021 divorce settlement, Bill and Melinda Gates pledged to continue working together on their philanthropic foundation, the Bill and Melinda Gates Foundation, which focuses on global health and development. The Gateses, who have donated more than $59.1 billion to their foundation since its creation, stated that they would continue to work together “to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction.”

Similarly, following her divorce from Amazon founder Jeff Bezos in 2019, MacKenzie Scott has made headlines for her philanthropic giving, donating more than $14 billion to over 1,600 charities and organizations. She works with a team of advisers to identify and vet community-focused organizations that work to reduce disparities in health, education, economic outcomes, and other critical issues.

But incorporating charitable contributions into a divorce settlement is not just for the rich and famous. In fact, charitable giving serves as a viable option for divorcing couples of all income levels. As charitable giving can take many forms, including donations of money or assets, one or both parties may choose to donate a portion of their property division to a charitable organization as part of their divorce settlement. This provides the parties with a way to support causes that are important to them, while potentially receiving tax benefits that can help offset some of the financial costs of the divorce.

There exist several types of vehicles that can help facilitate these charitable contributions. I have previously discussed the tax “win-win” associated with donor advised funds – accounts that parties can use to deposit assets for charitable donations over time. Divorcing couples who cannot agree on how to divide an asset may consider donating that asset directly or putting that asset into a donor advised funds.

Parties may further agree that one or both parties will contribute a certain number of dollars to a donor advised fund annually. Similarly, charitable remainder trusts are another vehicle available to divorcing couples. If a party plans to donate assets to charity, he or she could establish an irrevocable charitable remainder trusts that provides the income generated from the trust’s assets to their former spouse for a set period of time, after which the trust assets transfer to the designated charity. The spouse who donates the assets to the CRT may also enjoy the tax benefits associated with the charitable donation.

Overall, divorcing couples should consider incorporating charitable contributions into their final agreement. By working with qualified financial advisors and family law attorneys, divorcing couples can explore the best ways to incorporate charitable giving into their property division and create a positive legacy that will endure beyond their marriage.

This article originally appeared as a column for the Cleveland Jewish News.

Hello Dolly! Philanthropic world thanks you

By Andrew Zashin*

Every weekday, I walk by a sign that says, “What would Dolly do?” The small 8-by-11 sign is posted near the office entrance of one of my team members and every time I look at it, it makes me smile a little. Not because I’m a huge fan of Dolly Parton’s music, or acting, though I do enjoy both. But because when I think of Parton, I think of generosity, charity, kindness and grace.

I’m not the only one who equates Parton with these adjectives. On Oct. 13, she was awarded the Carnegie Medal of Philanthropy. Eric Isaacs, the president of the Carnegie Institution for Science, said Parton is a “tremendous example” of someone who understands the importance of philanthropy. He further stated, “Everyone knows her music … they might know Dollywood for entertainment, more broadly. But now they’re going to know her for her philanthropy, which I’m not sure they have before.”

I first became aware of Parton’s philanthropic efforts and the Dollywood Foundation in the early 2000s. As I recall, I read an article featuring Parton and how her foundation was shipping books to children from ages 0 through 5 in the United States, Canada and the United Kingdom free of charge through a program called the Imagination Library. Unbeknown to me, the Dollywood Foundation had been established almost 20 years earlier with the goal of helping children in Tennessee succeed educationally.

One of first programs launched by the foundation started in Sevier County and was called the Buddy Program. The program asked every seventh- and eighth-grade student to “buddy up” with another student, promising them $500 in cash if both students successfully graduated from high school. According to the foundation, the Sevier County High School’s dropout rate declined from 35% to just 6% as a result of this program.

Soon thereafter, in 1995, the Dollywood Foundation established the Imagination Library and began distributing books to local young children. According to the organization, the creation of the Imagination Library was, “inspired by (Parton’s) father’s inability to read and write. … (Parton’s) vision was to foster a love of reading among her county’s preschool children and their families by providing them with the gift of a specially selected book each month.

The Imagination Library has grown by leaps and bounds since it was established in the mid-90s. According to the Imagination Library website, since its inception, the foundation has gifted over 190,000,000 million books to children. The program is now available in Australia and the Republic of Ireland, along with the United States, Canada and the United Kingdom as previously mentioned. In 2020, 67 Ohio counties had partnered with the Imagination Library. Today, every single Ohio-born child is eligible to participate in the program.

And I’m happy to see her actions recognized by the Carnegie Institution and, by natural consequence thereof, the general public. It’s a whimsical thought, but perhaps if people are aware of Parton’s actions, they too may “do as Dolly,” and contribute to their own community. If you have a child under 5 years old and are interested in the Imagination Library, you can register at imaginationlibrary.com.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:04-05:00October 21st, 2022|Philanthropy|

What Gates’ divorce means for philanthropy

By Andrew Zashin*

On May 3, well-known philanthropists Bill and Melinda Gates announced they were ending their marriage after 27 years. Within her petition for divorce, Melinda Gates cited that the parties do not have a prenuptial agreement, but are asking the court to divide their assets pursuant to the terms of a mutually agreed upon separation agreement.

Presently, the terms of the separation agreement are unknown and are the cause of much speculation with media analysts. As a divorce attorney, my first thought went to the separation agreement, but then my focus shifted to the future of the Gates Foundation. More specifically, given their long history of charitable action through their foundation, I was concerned their divorce would put an end to their philanthropic efforts.

Bill and Melinda Gates created the Bill and Melinda Gates Foundation in 2000. The foundation contributes money and support to fight a multitude of problems such as climate change, poverty, gender inequality and, most recently, COVID-19. It is estimated since 2000 the foundation has spent over $53 billion to combat, “poverty, disease and inequity around the world,” according to its website. In 2020, the foundation donated over $1 billion to fight the spread of COVID-19. Money from the foundation went to assist with COVID-19 testing along with development and distribution of vaccines to prevent the spread of the virus.

According to candid.org, the Gates Foundation is the largest private charitable organization (i.e. a charitable entity that does not accept funds from the public) in the United States. The foundation, however, has locations not only in the United States, but also in India, China, Europe and Africa. According to the foundation’s website, the foundation has funded grantees in 48 states and the District of Columbia, and funded work in 135 countries in 2019 alone. More impressive, the foundation has already funded over 230 grantees in 2021. In addition, it is estimated that the foundation holds over $40 billion in assets.

At present, the Gates are indicating that both parties will remain co-chairs and trustees of the foundation despite the ending of their marriage. As a divorce attorney who works with divorcing or divorced individuals on a daily basis, I can say the Gates’ decision to continue to work together is extremely rare. For one, it is difficult for some divorced individuals to put aside feelings that potentially contributed to the divorce in the first place.

As a result, negativity can bleed into daily dealings and poison even the most benign conversations. In addition, divorced couples continuing to have close financial ties with each other following the termination of the marriage is uncommon. Many Ohio courts prefer couples make a complete financial break. The reason being, is a “clean break” prevents the divorcees from hovering over one another’s future financial decisions.

At this time, the Gateses do not appear to be concerned about making financial decisions for the foundation together as they have chosen to maintain their longstanding roles within the foundation.

Hopefully, in maintaining these current roles they will continue to work toward helping people live healthy, productive lives.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:07-05:00May 20th, 2021|Celebrity Divorces, Divorce, Philanthropy|
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