Robinson College professor shares knowledge, personal values toward giving
Conrad S. Ciccotello learned early in his work career the power of money to convey gratitude and receive intangible benefits.
As an attendant at a Pennsylvania country club, the teenaged Ciccotello met a club member who tipped more than anyone else. While others shelled out a quarter, the man would peel off dollar bills, sometimes even a five. Whenever his car appeared in the driveway, the attendants clamored over one another to help him.
The tip reflected the man’s love of sharing. “He enjoyed giving, and I always thought a lot of that kind of giving,” Ciccotello said. “It was his pleasure. I could tell that it was tremendously uplifting for him and those he gave to.”
This time of year, Ciccotello is a sought-after expert on the subject of charitable giving and other expenditures that impact personal financial planning and tax exposure.
As associate professor in the Department of Risk Management and Insurance in the J. Mack Robinson College of Business, Ciccotello also directs the Personal Financial Planning Program. National media, including the Wall Street Journal and National Public Radio, have tapped him for financial commentary.
Ciccotello, 51, not only advises people to give now to causes that are important to them – he also gives to GSU’s Risk Management Foundation. Inspiring others is part of his motivation.
“Personally, I think it’s wonderful to have clarity and intent about what you want to give to, and to make those gifts when you are alive,” he said.
“Small gifts over a long period of time can build a nice relationship [with the recipient], and you are identified as someone who is supportive. People look at that and think, ‘They must believe in it so maybe I will take a look.’ ”
Ciccotello offered insight on beneficial financial habits for year’s end, and a head’s up on tax benefits that will end after Dec. 31.
In general, what’s important to take care of before Dec. 31?
It’s a good time to look at your documents, particularly your will and power of attorney. Make sure those are up to date. Half of all adults don’t have a will and in some circumstances, if a person becomes incapacitated, not having a clear power of attorney will render his or her wishes moot.
To me, a will and power of attorney are the hammer and screwdriver of the financial toolbox. You have to have those elementary tools. If you want to add a “wrench,” put a living will on your list.
It’s also good to take a look at your beneficiary designations and make sure those accurately reflect your current wishes. Changes are inevitable.
What do you try to do by Dec. 31?
It’s natural for many of us to see the end of the calendar year as a time to take stock and get organized. Things tend to go to chaos if you don’t put the energy into organizing. I do believe financial success depends on a number of things and decent organization is one.
Some people are good with software like mint.com; others like me still organize based on paper. As long as you know where it is and someone can find where you put it, then you’re organized.
What about charitable gift annuities and charitable lead trusts?
It’s a good time to think about CGA’s because the rates are about to go down, from 5.3 percent this year to 4.7 percent next year. If you were to make the minimum gift of $10,000 this year, you’re going to make $530 a year on it. After Jan. 1, 2012, you’re only going to make $470 a year. So that might be good to sneak into.
It’s a great time to start thinking about doing a charitable lead trust in the next year before mandatory cuts in 2013. There is a lot of uncertainty surrounding a Presidential election, whether laws such as those governing charitable lead trusts will be locked in or subject to mandatory cuts in 2013.
Tremendous change in the tax regime is possible in 2012; charitable deductions could go away if we go to flat tax, for instance. It’s easy to get frozen up, so gain clarity now on what you want to get done by this time next year.
Any other changes to note by Dec. 31?
There is still a very generous unified exclusion for federal estate and transfer tax of $5 million. That’s a big opportunity for someone to transfer wealth to someone else. In 2013, that amount decreases to $1 million. Be careful gifting in this economic environment, but this is an opportunity to transfer assets, especially appreciating assets, to children.
Also, the charitable IRA rollover is available until Dec. 31. You can transfer lifetime gifts up to $100,000 from your individual retirement account (IRA) without extra taxes.
How is the current financial climate affecting the giving climate?
The last couple of years have been so crazy with the economy that I’ve been telling students to have not only an inventory of their finances, but also an inventory of emotions around money. It’s easier to list assets and liabilities — emotions about money are a lot messier.
Speaking of a will — most people don’t want to face the idea that they might be gone one day.
They don’t want to think about it, and if they get over that hump, they’ve got to go to a lawyer and get their documents together.
Our society is much more in a short attention span. There’s no app for making a will – there are tough issues and it takes time and about $135. In response, some companies today are offering as a benefit prepaid legal services for taking care of this.
Without a will, the probate process will attract a range of voices inspired by self-interest, and the only one who knows exactly what should be done is no longer there.
Why do you give to the Risk Management Foundation?
Merit scholarships make a difference to students at all levels; in that point in their lives, they don’t have much money and this can mean a great deal.
I’ve seen their financial plans, and it’s amazing the number of students who are supporting brothers, sisters, and parents and are working while going to GSU. With so many compelling stories, it’s easy to want to help students who are working that hard to get an education.
The foundation has been very successful in accomplishing that mission and my wife and I want to support that. It’s important to us to be examples for others. I don’t want to say that someone should do this or that and not do those things myself.
—By Michelle Hiskey; Contact Kim Cretors, (404) 413-3424