MW Bill Gates is giving away 99% of his money. You can bet your heirs have noticed.

By Morey Stettner

Most of us can't be as philanthropic as Gates, but we should plan for our legacy

Gates's announcement is a springboard to consider the value of giving away more money now, not later.

Posting on his blog last Thursday, Bill Gates shocked the philanthropic world with a stunning announcement: the Microsoft $(MSFT)$ co-founder will accelerate his plans to give away almost all of his wealth over the next 20 years.

He vowed to reduce his net worth (currently estimated at roughly $168 billion) by 99%, donating it all through his Gates Foundation. In 20 years, the foundation will shut down.

Read: Here's how much of his fortune Bill Gates will leave to his kids - but who gets the $130 million Washington estate?

While most of us might admire Gates's intent to use his money to tackle urgent problems now and not "die rich," the news may resonate even more with the wealthiest Americans. Many of them have set up charitable foundations, built on vast fortunes, that are designed to outlive them.

"Bill Gates is saying he can make more of a difference by giving his money away over 20 years as opposed to keeping his foundation going in perpetuity," said Mitchell Kraus, a certified financial planner in Santa Monica, Calif. "That can be a great talking point for high-net-worth and ultrahigh-net-worth clients to question their giving [strategy]."

Kraus, who hosts the Giving Intelligence podcast, understands that he can't preach about philanthropy. With his clients, he probes to uncover their goals and values - and works from there to raise their awareness of charitable options.

"It's often a multiyear process," he said. "It's planting seeds. I may say, 'I don't think you're ready for this now, but let me throw it out there and we'll discuss it again in a year.'"

That way, Kraus begins a conversation about philanthropic vehicles such as donor-advised funds, charitable remainder trusts, charitable lead trusts and starting a foundation. Presenting these possibilities to charitably minded clients can motivate them to follow through later.

To get clients to maximize their philanthropy, Kraus helps them make a conceptual shift in how they see the world. "Most of the wealthiest Americans have spent their life building a fortune and are in a growth mindset, not a giving mindset," he said.

Once people adopt a giving mindset, they can appreciate its practical benefits and tax-avoidance strategies. Still, for many Americans, there are limited tax advantages for making large charitable donations. But the wealthiest have more tax-saving opportunities.

Case in point: the estate-tax exemption. Estates of individuals who die in 2025 have a basic exclusion amount of $13.99 million ($27.98 million for married couples). In 2026, this may revert to $5.48 million if Congress doesn't intervene (although the amount would be adjusted for inflation).

"It's more likely that it will be extended, although Congress probably won't make it permanent," said Yesenia Realejo, a certified financial planner in Plantation, Fla.

Realejo might encourage wealthy clients to donate any amount above the estate-tax exemption to charity. "It's an incredibly effective and simple tool to eliminate their estate tax while also benefiting causes important to them," she said.

But she doubts that the Gates news will significantly impact her clients' attitudes about giving. "The reason they donate is extremely personal," she said. "I can't see external factors, like what Bill Gates is doing, influencing them much."

On the other hand, some financial advisers see the Gates announcement as a springboard for clients to consider the value of giving away more money now, not later. For example, the philanthropically minded can benefit from a qualified charitable contribution (QCD). Once you hit age 70-and-a-half, you can donate a chunk of your IRA directly to a qualified charity -with up to $108,000 per person, in 2025, excluded from taxable income. "It becomes a de facto tax deduction," said Owen Malcolm, a certified financial planner in Peachtree Corners, Ga.

"Hopefully, what Bill Gates is doing causes some self-reflection," he added. "It can be a time to ask, 'What about my legacy?'"

Read: Bill Gates will give away $200 billion in the next 20 years. It's nearly all his wealth.

More: Warren Buffett's succession plan has begun. Here's what one insider is watching.

-Morey Stettner

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May 10, 2025 07:50 ET (11:50 GMT)

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