PG Calc Featured Articles

As a result of the American Taxpayer Relief Act of 2012, an estimated 99.87% of Americans will die without their estates being subject to federal estate tax.  At the state level, however, the situation can be quite a bit different.  Accordingly, in appropriate circumstances gift planners should alert donors to the possibility that a state estate tax or inheritance tax – or both – may apply, while pointing out as well ways to reduce or eliminate such taxes by making charitable gifts.

As a result of the American Taxpayer Relief Act of 2012, an estimated 99.87% of Americans will die without their estates being subject to federal estate tax.  At the state level, however, the situation can be quite a bit different.  Accordingly, in appropriate circumstances gift planners should alert donors to the possibility that a state estate tax or inheritance tax – or both – may apply, while pointing out as well ways to reduce or eliminate such taxes by making charitable gifts.

Except for museums that are accustomed to receiving gifts of art and artifacts, charities tend to focus on gifts of cash, securities, and real estate. In the process, they may be missing opportunities to attract valuable gifts of tangible assets. 

Any physical object of value could make a great gift to your organization. The list includes, but certainly isn’t limited to, artwork; antiques; stamp, coin, and other collections; gold and silver; cars and other vehicles; and boats.

The person making the gift executes a deed of gift conveying ownership and delivers the object to the charity. The gift is complete when both of these events have occurred.

There are a number of issues to keep in mind when working with a supporter who is considering a gift of tangible personal property.

It should come as no surprise that charitable gift annuities feature a measure of risk. Nevertheless, a charity can take steps to maximize the likelihood its gift annuity program will be successful in spite of the potential downsides. The secret lies in understanding the inherent challenges and then assessing how well the program is responding to them.

A charitable remainder trust (CRT) is nothing more than a trust with one or more charities as its remainder beneficiary(ies). When a donor establishes such a trust, it will typically be a qualified CRT, meaning it meets a number of different requirements that result in various federal tax benefits for both the donor and the trust itself. If those benefits are of little or no value, however, then a host of planning opportunities becomes available to donors who want to customize their CRTs.

By including the non-profit in her will or living trust, a donor has elevated your organization to the same status as family members, friends, and other loved ones. Through proper stewardship you can ensure that this decision is a life-affirming one for the donor and remains in place, perhaps even growing in the process.

With diligent gift administration, you come full circle by ensuring that the donor’s desire to make a difference is realized to the fullest extent possible. You do this by seeing to it that your organization receives all that it is entitled to, as quickly as possible.  Diligent oversight is particularly important in the case of residual gifts (percent of the estate), where costs and fees all affect the bottom line and there is often delay in making distributions.

If there’s one piece of advice you’re probably tired of getting, it’s “always be marketing bequests.”  Of course, this is good advice because you do want your organization to be included in the wills of your donors. It is an ideal arrangement for both parties - donors are able to provide a gift to your organization after their lifetimes with little or no current financial strain, and your organization is strengthened by their gifts, whenever received. 

Here is one suggestion of a different way to carry out that marketing dictum, an approach that can be particularly meaningful and rewarding for you and your donors. Consider “ethical wills”.

A donor establishing a charitable gift annuity has the option of using the IRS discount for the month in which the contribution is made or for either of the two preceding months. Should the donor always select the discount rate that will produce the largest charitable deduction?  Not necessarily.  Making the right choice entails understanding a few details about the role played by the discount rate.

The American Taxpayer Relief Act (ATRA) passed by Congress on January 1, along with the Affordable Care Act, have inaugurated a host of changes to federal tax rules that will alter donors’ tax incentives for making charitable gifts, including planned gifts.

For the most part, there is good news to share:

• Despite consideration of a 28% limit on charitable deductions or a total dollar limit on all itemized deductions, in the end no significant new limits on the charitable deduction were introduced;
• There are opportunities for some taxpayers to save more in taxes by taking charitable deductions;
• There’s less uncertainty about the future of transfer tax rates and exemptions, making some donors more comfortable with making estate plans that include charity; and
• The charitable IRA rollover is back, at least for 2013.

Beginning on January 1, 2011, the oldest members of the Baby Boom generation celebrated their 65th birthday. In fact, on that day, today, and on every day of the next 17 years, an average of 10,000 baby boomers will reach age 65.
The Pew Research Center reports that the aging of this cohort of Americans (26% of the total U.S. population are Baby Boomers) will dramatically change the composition of the country. Currently, just 13% of Americans are age 65 and older.
Incredible statistics! With the huge number of people retiring over the next 17 years, there appears to be a golden opportunity to provide your donors with solutions for additional retirement income.
This article outlines several suggested solutions to help you help your donors find giving options that will benefit them in retirement, as well as your organization.