Changing Horses in the Middle of the Stream
A. It has been three years since Madeline’s husband died of cancer. Madeline has made an overture to the cancer hospital where her husband was treated, stating that she would like to make a gift. After reviewing several illustrations of various CRT and CGA options, she decided to make an outright gift. “Cancer research can’t wait for me to die, and I have $8 million in my stock portfolio, so I won’t miss it.” As the gift planner was preparing stock transfer instructions for Madeline, the planner’s long time neighbor and financial advisor called. “Say, Madeline told me about her idea for the hospital, and I’ve got you one better. She can put that same money in a life insurance policy and double her gift. She just signed the application, and I’ll drop it off at your office this afternoon.” Madeline tells the gift planner that she has known the financial advisor for so long that she’s afraid if she tells him no. It will hurt his feelings and damage their relationship, and she can’t take that risk.
Did the financial advisor act inappropriately?
Should the hospital attempt to talk Madeline out of the insurance gift?
B. Suppose the shoe is on the other foot…financial planner approaches the hospital and states that one of his best clients wishes to donate a soon-to-be-purchased life insurance policy. The client has never made a gift to the hospital, and her name does not appear anywhere on any data base at the hospital. The hospital’s gift planning officer visits the client prior to the signing of the policy application and convinces her to make a major outright gift or CRT/CGA to the hospital instead.
What should the financial planner do?
Has the hospital acted inappropriately?
