Leaving it to the Government
Most people set up their estate plans to minimize tax and keep their money out of the hands of the government. This is a story about a couple who did the opposite.
A recent article from ABC tells the story of Peter and Joan Petrasek. The couple had prepared wills that left everything they had to the United States government. Earlier this month, the US treasury received a cheque for $847,215.57 USD.
It is unclear exactly why the couple left their estates to the US government, although the article speculates that it may have been out of gratitude to the country that took them in. Peter Petrasek had fled from Czechoslovakia during World War II and escaped to Ottawa, where he met his wife, Joan. The couple moved to the United States in the 1950s.
It seems that they had no children and no living relatives, so they left their estates to the government. In similar circumstances, many would choose to leave their assets to friends or to charity. The Petraseks, it appears, wanted to thank the country that gave them a home.
This story gives us a different perspective on what it means to give money to a government. A tremendous amount of time and effort are spent on crafting and implementing legitimate estate planning mechanisms which are aimed at reducing the amount of tax that has to be paid on a person’s death. Often, testators have spouses, children, or other family that they intend to receive their property on death. Keeping money out of the hands of the tax collector means that their loved ones will receive more from their estate.
It may be that there is a lesson to be learned from the generosity of the late Mr. and Mrs. Petrasek. Governments perform a wide range of functions, many of which are aimed at the delivery of services to the public. A lot of these functions are similar to those performed by charities. Governments use our tax dollars for investments in medical research, public infrastructure, and social programs for those in need, among other things. Paying taxes out of an estate can be viewed a way of giving back to your community.
On a similar note, in 2011, Toronto City Council approved a measure to add a Voluntary Contribution option to property tax bills. Now, Toronto taxpayers are invited to make a voluntary donation to City services each time they pay their property taxes.
While many of us remain tax averse, it is refreshing to be reminded that there are generous souls out there who are grateful to the communities they live in, who recognize the important role that governments can play in that, and who are willing to contribute.