By TOM GRAY

Contributing Reporter

When they sit down to write the last chapter of their success stories the one about where their money goes when they're gone some of very rich seem to be taking a cue from Andrew Carnegie. The industrialist and champion of philanthropy didn't believe in burdening children with a big inheritance.

"I would as soon leave my son a curse as the almighty dollar," he once said.

Today, Warren Buffett has called inherited wealth "food stamps for the rich." Los Angeles entrepreneur Alfred E. Mann, who is giving $100 million each to the University of Southern California and UCLA, likewise said he wanted to make sure that too much money doesn't destroy the work ethic of his six children.

People with large or even middling estates have another powerful reason to leave money to charity the tax bite. Charitable donations, no matter how large, escape estate taxes. That's not the case with money left to heirs other than spouses.

Try to leave $3 million to your children, for instance, and the government will take almost a million of it. On $30 million, the tax bite rises to more than half nearly $15.8 million. Not only is money lost to the children, but those who have accumulated it will have no say in how it is spent.

Add to this the wealth built up in recent years from the stock market and real estate. Throw in the appetite of non-profit groups for more money. The result is a trend toward more estate-planning philanthropy.

"From my own experience it's anecdotal," said Fred Marcus, a Los Angeles attorney who specializes in estate and charitable planning. "But I think it's absolutely happening."

Marcus says his clients "want to do something for the kids but once the kids and the spouse are taken care of, they would rather support the things they think are important rather than send (their money) to the Internal Revenue Service."

For an estate over $10 million, he said, it's not unusual for 60 percent to go to the family and 40 percent to go to charity or to a family-run foundation. "I've seen people with $50 million estates," he added, "who say $2 million is enough for the children and the rest will go to charity."

Scott C. Fithian, a Boston-based financial adviser who helps families craft charitable-giving plans, has seen the same pattern. This is not necessarily because parents want their kids to have less, he says, though "a lot more thought is going into what might be an appropriate amount to leave to individual heirs." He said parents don't want their money to be "a disincentive for children to achieve in their own right."

As with other aspects of charitable giving, statistics are sketchy on gifts from estates. But a report released last month estimates that bequests rose 10 percent in 1997 a faster rise than overall giving, which the report gauged at $143.6 billion, up 7.5 percent over 1996.

The total for bequests does not count the money that people give away while they're still alive. And willed giving is not the only form of posthumous philanthropy. Donors also can set up charitable trusts, which provide some money to support heirs and family foundations.

A foundation, in particular, offers the best of both worlds to donors. They can keep their money in the family (though for purposes of charity, not consumption) rather than giving it to the IRS, and they can direct how it's spent as long as their children share their vision.

Cheryl Zoller, a Los Angeles-based manager of family foundations, says people are often drawn into philanthropy late in life because of tax concerns but end up getting hooked on the charitable work itself. They then set up a foundation.

Among other things, Zoller helps them (and their children) get focused by drafting a mission statement: "The idea is for them to lay the groundwork and have their children and grandchildren continue the work they've started."

As for the children, they're increasingly being enlisted as partners in this work inheriting a mission as well as some (and maybe not all that much) money.

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