Passion for Charity
Larry Katzenstein, of St. Louis’ Thompson Coburn, on the joy of helping charities help society, making estate planning clients feel at ease, and conducting the St. Louis Symphony
Published in 2011 Missouri & Kansas Super Lawyers magazine on October 17, 2011
Q: How do you build a relationship with your estate planning clients?
A: It’s about being a good listener: what motivates them; what concerns them; what their relationship is with their children. You really have to be so acutely aware of family relationships. Some parents might be concerned that their children can’t manage money, and maybe it’s justified and maybe it isn’t. Some are concerned about who their children are married to, and it’s interesting hearing how that works out. Some have difficult relationships with their spouses. People are interesting and everybody’s different.
Q: Why were you drawn to tax law?
A: In law school I took a tax course and was surprised by how interesting it was. The whole public policy about taxation systems is interesting: what type of tax systems are fair; which ones work. And just the fact situations I found fascinating—like whether embezzled income is taxable. [And] I like the people aspects of it. About half my practice is representing charities and planned-giving programs: charitable remainder trusts, working with donors and so forth. I like that aspect, too. I like helping charities do good things with people’s money.
Q: With the current economic climate, how are charities faring?
A: I think it’s more difficult for charities because people have less money than they did before the Great Recession, although it’s recovered somewhat. In the charitable area, so much depends on the economy.
Q: What are some challenges that you help charitable clients tackle?
A: Boy, they’re everywhere. They could be gifts of unusual assets—many years ago, I remember a gift of a barge. The tax law in this area is very complicated. When I work for the public charities, the universities and private donors, we get a lot of questions about, “This donor wants to do this—can he?” Or, “What other trust or gift arrangement would work under these set of facts?” Some of these wealthy donors are very interesting and have accomplished a lot. One was an inventor and started a company based on an invention. He gave a lot of money to a charitable client, and we worked out all sorts of interesting, complex ways for him to do that.
Q: How did the tax law enacted last December affect your practice?
A: It had a huge effect, because they changed the estate tax rates. And last year, we didn’t have estate tax [though it was optional]. Or generation-skipping tax. So we did some very serious year-end planning for clients. Because there was no generation-skipping tax last year, there was an incentive to move some trust money down to another generation in some cases, and in other cases, people were making large taxable gifts to avoid generation-skipping tax. We didn’t know that until December 17, so we had a very furious two-week period to do a lot of stuff. That made it pretty interesting.
Q: I understand you’re a first-generation American?
A: I am. My mother was born in Russia; came over as a small child. My father came over in 1936, when he was 28 years old, from Germany. He left because he could not get his medical degree without showing proof of Aryan birth to the German government. So since he couldn’t practice there, he left. [He became] a physician in a small town in southern Illinois and practiced medicine until he was in his 80s. His father was a doctor, too. I would have been the third generation.
Q: Why the law then?
A: I think it was several things. First, the little town that I grew up in, Salem, [Ill.], was the birthplace of William Jennings Bryan, and so we always saw these movies and plays about the Scopes trial. And watching Perry Mason and The Defenders. Also, when I was 13, 14, 15, there was a St. Louis radio station that had a five-minute thing every day called “Point of Law,” and they would discuss some point of law. They’d make it like a quiz. They’d give you a fact situation and you had to guess what the law is. I would listen to that every day.
I was also very interested in politics and government. I was a political science major, and it was the ’60s, which were a pretty turbulent time of politics. I like the fact that law is so general, too. Law school appealed to me because [the law] deals with so many different aspects of life.
Q: Did your father’s experience provide a backdrop to your youth?
A: My father didn’t talk much about Germany; his background was so dramatic, I’m sure. He lost his parents in concentration camps. He was a huge influence on me, though, because he had a lot of intellectual interests that made me very curious. He was a huge music lover and so we were always [listening] to classical music, which became a very important part of my life.
Q: In fact, you’re active with the St. Louis Symphony?
A: I’m on the board and I’m on the executive committee, and once a year I make a contribution to the orchestra and conduct a concert. I started doing this maybe 20 years ago. I’ve been a fluent score reader all my life, so I started taking some coaching from one of our assistant conductors. He conducted the youth orchestra, and I asked if I could make a contribution to the youth orchestra in exchange for some time rehearsing … and then I started doing it in a concert. So once a year I get to conduct a private concert for friends and clients.
Q: What is it like to be on stage performing?
A: It’s exciting to be in the midst of all that music. This orchestra is very responsive. If I take a little tempo change or indicate louder or softer, they really watch me. It’s very satisfying to be shaping the music. I don’t pretend to be anything like a professional conductor but it’s very enjoyable.
Q: You’ve also designed a computer program, Tiger Tables, which the IRS has used.
A: I got an IBM PC in 1985 and I was fascinated with this new machine. … I just started writing programs for fun. Then one day I saw this actuarial formula in the regulations under [Internal Revenue Code] Section 170, and I thought that might be a good exercise to see if I could program this actuarial formula. Actuarial calculations are calculations that we use a lot in both charitable planning and estate planning. Then Congress changed the rules so that we had a floating interest rate every month, and that made the computer program really useful because the books got real thick with factors. … People heard about it, starting asking about it, and I started selling it.
Q: Is your own estate planning all locked in?
A: Oh, yeah, I don’t have a huge estate so it’s fairly easy, with these $5 million exemptions.
Q: What has been a career highlight for you?
A: I’ve just had some pretty interesting clients over the years, some of whom you’ve heard of. That’s been a highlight.
A: I’m not going to say anything more.
Q: Can you tell us about any of your clients?
A: I do a lot of work for Washington University in St. Louis, which is where I went to college. And they have lots of loyal alumni. And I represent lots of local charities in this area. I do a lot of work for the American Bible Society—which has been around for, like, 200 years. I think representing these charities has been a real highlight. The educational organizations that I work with give lots of scholarships, and it’s nice to know that you’re helping people give money that will help someone go to college who couldn’t do it otherwise. It’s very gratifying, because you feel like you’re doing some good for society.