Tom and Scott Word are a father-son pair with decades of experience in tax and estate law. They are committed to their clients, respected by their advisor peers, and valued within the community for their personal and professional commitment to philanthropy. In addition to philanthropy as a natural extension of their work with clients, they also have served on the boards of numerous foundations and charitable organizations in the Richmond region.
Tom was among the first lawyers to join McGuire Woods early in his career, but he later found joy in starting his own practice with Scott at Word & Word PLC. Today, they continue to work together, now with Virginia Estate & Trust Law PLC. Recently, we sat down with them to discuss their careers, lessons learned and the reasons why advisors are important to philanthropy.
How did you get into estate planning?
TOM: I started practicing law in 1961 and became the 9th lawyer at what is now McGuire Woods. My mentor was Thomas C. Gordon, Jr., a renaissance lawyer who did both the trust and commercial work for First & Merchants Bank, which is now Bank of America. He handled the finance work for Reynolds Metal and took A.H. Robins Company public and many other things. In 1964, he went on the Virginia Supreme Court and I was fortunate to inherit many of his clients, including the trust department of the bank – the largest trust department in Virginia at that time.
In 1980, I was elected president of the Richmond Bar Association. It was during the 1980’s that wealth really began to grow and people became more interested in philanthropy. Then I became the Bar Association’s appointee to the Community Foundation’s Board of Governors in the early 1990’s soon after the introduction of donor advised funds and a critical time in the Foundation’s growth trajectory.
SCOTT: Before I started working with my father, I had a brief career as a development director with the Ruffed Grouse Society. I was responsible for creating their planned giving program and travelling around the country meeting with current and prospective donors. When I had children, I ended up going into estate planning, where some of the skills I gained as a development director fit nicely.
Did you become a lawyer with the idea of going into estate planning?
TOM: No. I grew up on a sheep farm in Southwest Virginia and my father died when I was 15. He was a totally self-educated, single practitioner lawyer in the little town of Christiansburg. He’d never gone beyond high school, but he read law and passed the bar and opened a law office in 1936. He had two professions. When he died, I thought I wanted to stay and run the farm. Even as I ran it in high school and college, I realized I couldn’t make a living at it. That’s when I decided to go to law school.
My ending up an estate planning lawyer was an accident. It’s the old saying, “What kind of law do you practice?” “Well, I practice whatever comes through the door.” In the early days, people didn’t specialize as much as they do now. I was doing corporate financing, bank lending work and over time, as there was more and more estate planning work to do, I kind of gravitated to it.
What are some of the reasons clients talk with you about philanthropy?
TOM: I was very fortunate that one of my early connections was with the Gray family, who have always been very philanthropic. At the time, the estate tax law was punishing – the exemption was only $60,000 for estate tax and the marital deduction was limited to 50% of an adjusted gross estate. The Gray family found that charitable lead trusts were an effective tool to help them pass down wealth to the next generations without all of it having to be sold and disappear. That’s how I got involved with philanthropic estate planning. In 1997, the Gray Foundation elected to become a supporting organization of the Community Foundation so they didn’t have the strictures of a private foundation. Later, the family opted in favor of several donor advised funds to further simplify and give each branch of the family greater independence in making their own grant recommendations.
I had other clients who turned to philanthropy when they felt their descendants had enough inherited wealth – including a gentleman with a $2-3 million estate, who established a fund at the Community Foundation to support Southside Virginia. Other families used philanthropy to help teach their children and grandchildren values and a means to give back to their communities.
SCOTT: I have had the privilege to work closely with the Boys & Girls Club both as a volunteer and then on its board. One of the needs I saw there was a way to connect with the donors in terms of longevity and attracting large gifts. I saw the Community Foundation as a natural fit and encouraged their board to put money into an endowment at the Foundation. From that experience, we had one donor who talked to us personally because he felt the Community Foundation had a track record and could handle money over a longer period of time, giving him a degree of comfort about leaving a large gift and that was Jim Frye.
TOM: An interesting thing about Jim Frye is that he was a longtime philanthropist. He had no children, he had done very well with Philip Morris, and he gave a lot of money confidentially to many different charities every year. He was very private about it. We convinced him that after he died, he could influence others to be philanthropic by allowing the Community Foundation to reveal his philanthropy over his lifetime and his large gift to the Community Foundation at his death to continue support for his causes. We told him, “you could help other people become philanthropists if they could hear your story.” He agreed that after his death, the Community Foundation could celebrate his philanthropic legacy. The Foundation now carries out his wishes through annual grantmaking from a number of restricted and unrestricted endowments.
(In the fall of 2015, the Community Foundation hosted a celebration in Jim Frye’s memory, sharing stories about his youth and career, as well as other defining experiences that shaped him into a respected leader and inspiring philanthropist. The event was attended by a few of his close friends and representatives from the many organizations that have benefited from his generosity over the years.)
How do you view the role or importance of advisors in philanthropy?
TOM: The goal of every conscientious lawyer is to become a trusted advisor to clients, to gain their confidence by sound advice in their interests. If you achieve this, you can sometimes help them with their families. Everyone worries about what will happen with their spouse, children and grandchildren after they are gone. People who are philanthropic come to realize they thereby influence by example their descendants to do good for the community, making them better citizens and enhancing their sense of self-worth. People strongly want their children and grandchildren to be unselfish, caring people. They want them to accomplish things and have a reputation for caring about others.
Over time, have the expectations of your clients changed?
TOM: In the early days, very few of them had much capacity to give beyond to their churches. As they became wealthier, they realized you can give too much to your family. They come to realize it is often best to give some of their wealth to philanthropy.
How do you raise the topic of philanthropy with your clients?
TOM: Being a good advisor – the “trusted advisor style” of lawyer, which is the really satisfying way to practice law – requires listening. It’s not telling your client what to do, but rather listening to them and figuring out what they want to do. Sometimes they don’t know. If I’ve ever had any influence on people, it was much more from listening to them and echoing back how their minds were working.
How do you compare the Community Foundation to other philanthropic options?
TOM: The Community Foundation’s greatest competition are the major investment houses. The way I point out to clients the difference is, “You need someone who knows the needs of the community and can guide your family to do the most good.” A donor advised fund at a financial house could give you the same tax results, but you don’t gain the insights into community needs that you or your family will need. Many of our clients go through a financial house, but the more significant ones often end up with the Community Foundation or a large academic or health care institution, depending on their interests.
How have you seen the Community Foundation evolve over time?
TOM: In the early days, the foundation’s staff was much smaller and it was more of a service organization, not really soliciting additional contributions. With the passage of time, I’ve seen the Community Foundation become a larger force for good and we applaud that, but service to donors is key to its mission. We also think clients have become more sophisticated. They appreciate the Foundation’s recent changes that allow for donors to choose from a wider variety of investment options, including the option for donors of larger funds to have their donated assets managed by an investment advisor of their choice.
SCOTT: My admiration of the Community Foundation came through my friendship with Todd McFarlane at the Boys & Girls Club. On a day-to-day level, I saw things going on in Richmond that I didn’t know about. Todd didn’t even realize how much he taught me. The Community Foundation does the same thing for its donors. When you have a chance to do something on the inside that makes you learn about the needs of Richmond, that has helped me more than anything else. I can talk about it with just about anybody, including my clients. I was able to share this kind of valuable information with Jim Frye when working with him.
Another opportunity I see emerging are the young people coming through high school and college with a high degree of altruism. They are taught a lot about the needs of the community and they do volunteer work. In time, I think it will be wonderful to see them become more connected to organizations at an earlier age. When I was young, I knew about people living in disadvantaged circumstances, but I didn’t know much about what I could do to tackle it. The Foundation’s connection to schools that are encouraging volunteerism is a great thing.
Do you have advice for other advisors in considering the philanthropic needs of their clients?
TOM: One of the little things I firmly believe is that, if you’re a hard-working lawyer in a big firm or a small one, you need to have at least one and preferably more hobbies so you can get away from it. For some people it’s golf, for me it’s bird dogs. I can trace most of the major clients I have to a mutual love of bird hunting.
SCOTT: I share my dad’s love of bird dogs, but I also love golf. I think what my dad is saying is that when you meet your clients, especially those who are philanthropic, through your passions, you become friends with them and they open up to you pretty well.
TOM: If you share an interest with someone that is not business, it becomes easier for them to trust you in a business or philanthropic context.