Beware of Dilettante Attorneys

dilettante - noun: 1. An amateur or dabbler; especially, one who follows an art or a branch of knowledge sporadically, superficially, or for amusement only.

I just couldn't resist a post on one of the more ludicrous pieces of legal advice I heard about last week.

Art/tangible property gift - will be displayed (for three years, no less) but since it wasn't a museum and the piece had nothing to do with the institution, there were concerns whether this could qualify for related use and provide the donor with a full fair market value deduction (see other posts under Art and Tangible Property).

Initially, when this came up, I recommended - as I typically do for these types of situations - to get an opinion from outside legal counsel. Somehow, they ended up getting an opinion from one of the in-house lawyers from one of the planned giving marketing providers out there.

What was the opinion? The "lawyer" told this institution that since they planned to put the art work on the walls (ie..display it), it should be exempt as a furnishing.

OK, here is the reg section on related use which does exempt furnishings from this rule:

Reg. 1.170A-4(b)(3)(i)...If furnishings contributed to a charitable organization are used by it in its offices and buildings in the course of carrying out its functions, the use of the property is not an unrelated use.

I am not going to even bother to research if we can interpret this sentence in the IRS regulations to mean this - it's a waste of time because there is no way in ... that you can classify a work of art as a furnishing by virtue of hanging it on the wall (and rendering the entire related use question mute).

So here is the lesson. There are a lot of dilettante attorneys in the planned giving universe (some of whom have no clue what they are really doing). I am talking about people who have legal degrees but may never have practiced law, let alone anything remotely associated with estate planning or gift planning. They could be financial salesmen, consultants, in-house experts, etc... And, they could actually be providing very useful information and guidance.

But, when it comes down to a real legal opinion or drafting of a real legal document, the litmus test is whether this attorney is in the practice of law and has his/her malpractice insurance to back-up his/her work.

Using a lawyer, in the actual practice of law, is an insurance policy in case anything goes wrong. I used to draft all CRTs for the first in-house planned giving job I had. Then, as a legal consultant to Jewish federations across the country, I witnessed some very disastrous situations and the question always came down to: who drafted the trust? That is when I realized that trust documents and other truly legal things are best left to attorneys in the practice of law.

So, I am admitting - at least for now - you should put me in that category too since I don't currently practice law in a law firm. Pretty hard for me to write this but it has to be said. Be careful about your sources of information. Guys like me provide very useful educational information and we might even walk practicing attorneys through creating various gift plans. But, at the end of the day, I don't have the level of legal responsibility a lawyer in a law firm has.

The trick is to know when you need an actual practicing attorney and when you can rely on us "consultants." And, the other trick is to figure out when the advice is completely bogus. If it is too good to be true...