Lasallian Heritage Society
We would like to recognize and thank the following individuals who have informed the Brothers that we are being remembered in their wills or other estate plans. If you have remembered the Brothers, but do not see your name here, or if you have questions about enrolling in the Lasallian Heritage Society, please contact Patrick Donahue in our District office at (732) 380-7926, or at donahue@fscdena.org.
Mrs. Barbara A. Adamcik
Mr. John V. Albertella
Mr. William R. Baillie
Mr. & Mrs. Raymond Bergen
Ms. Marietta Bilardi
Mr. & Mrs. William T. Boyd, Jr.
Mr. & Mrs. John T. Boyle
Mr. Paul T. Braceland
Mr. & Mrs. John T. Breijo
Jerome H. Brodish, MD
Mr. & Mrs. Desmond X. Butler
Mr. & Mrs. John Califano
Mr. Conrad A. Calvano, Sr.
Mr. John J. Cannon
Mrs. Alice Taylor Carey
Mr. Anthony J. Carlo
Mrs. Mary F. Carney
Mr. Edwin J. Cartoski
Mr. & Mrs. Richard J. Carville
Mrs. Mary Ellen Caulfield
Mrs. Jeanne M. Ciancetta
Mr. Martin J. Collins
Rev. John Andrew Connell, AFSC
Mrs. Yvette Connell, AFSC
Mr. Maurice L. Costello
Mrs. Barbara A. Covello
Mrs. Kathleen M. Coyle
Mrs. Carolann Coyne
Mr. & Mrs. William N. Coyne
Mr. Robert M. Cozzi
Mr. Rich Creehan
Mr. Albert W. Crew
Mr. & Mrs. John M. Cullen
Mr. & Mrs. John P. Dalton
Mr. & Mrs. Joseph N. Daniszewski
Mr. Anthony T. DaPonte
Mr. & Mrs. Rocco J. Demo
Mr. & Mrs. Francis M. Devaney
Mrs. Audrey Dix
Rev. James I. Donlon, AFSC
Mr. Sean Duffy
Mrs. Marie Elko
Mrs. Maria Fleites
Mr. & Mrs. John Flynn
Dr. Mary Flynn-Maguire
Mr. & Mrs. Gary J. Gagliano
Mr. John J. Gallagher
Mrs. Jennie M. Gilliland
Mr. Robert G. Gorman
Col. & Mrs. John D. Grabenstein
Mr. Robert D. Greason
Mr. & Mrs. John W. Gural
Mr. & Mrs. Michael Gutowski
Mr. & Mrs. Mark D. Hall
Ms. Katharine A. Hammeke
Mr. & Mrs. Edward C. Hartmann
Mr. Robert H. Heckmann
Mr. & Mrs. Francis J. Heneghan
Ms. Patrice M. Henning
Mr. Charles J. Henry
Mr. & Mrs. Robert P. Hester
Mr. Eugene F. Horan
Mr. Robert J. Ivory
Mr. J. Andrew Jackowski
Mr. John E. Joseph
Mr. Christopher Jungers
Mr. & Mrs. Matthew Kamieniarz
Mr. Patrick J. Keogh
Mrs. Mary I. Kramer
Mr. Walter L. Kraszewski
Ms. Mary J. Kunzler
Mr. & Mrs. John J. Lambert
Mr. Francis R. Lewis
Mr. & Mrs. Kevin M. Leyden
Mr. Peter B. Lodewick
Deacon & Mrs. John K. Lohrstorfer
Mr. Matthew Lord
Mr. & Mrs. Thomas J. Lynch
Mr. & Mrs. Robert R. Lynn
Mr. Robert H. Mace
Mr. & Mrs. William J. Maraist, Jr.
Mrs. Arlene McCaffrey
Rev. R. Thomas McConaghy
Mr. & Mrs. Daniel G. McConnell
Mr. & Mrs. Dermot J. McDonnell
Mr. Charles P. McDowell
Mr. & Mrs. James J. McKay
Mr. James M. McMonagle
Mr. Henry P. McNally
Mrs. Barbara McOscar
Mrs. Virginia A. Molitor
Mr. & Mrs. Patrick J. Moran
Mr. & Mrs. Ralph Morera, AFSC
Mr. & Mrs. Michael J. Morseberger
Dr. Ronald R. Mrozinski
Mr. & Mrs. Don A. Mulholland
Mr. & Mrs. Paul F. Murphy
Brig. Gen. & Mrs. Arthur J.
Nattans, Sr.
Mrs. Lucille Naughton
Ms. Sheila M. Nolan
Mr. & Mrs. Ronald A. Normand
Mr. G. Dennis O’Brien
Mr. Robert E. O’Brien
Mr. & Mrs. George Ojeda
Mr. & Mrs. Bernard P. O’Prey
Mr. John F. Palisi
Mr. & Mrs. John J. Quindlen
Mr. & Mrs. Jeremiah Quinlan
Mrs. Kathleen V. Quinn
Mr. Raymond Raedy
Mrs. Helen L. Randall
Mrs. Susan A. Reed
Mr. John J. Reilly
Mr. Daniel Ruppert
Ms. Marion D. Schock, BFSC
Mr. & Mrs. Lawrence P. Schurek
Mr. & Mrs. Rosario Sciglio
Dr. & Mrs. James T. Sedlock
Mr. & Mrs. Richard L. Sheer
Mr. John P. Sindoni, AFSC &
Mrs. Cecilia B. Sindoni
Mr. Mark G. Storz
Mrs. Frank D. Sullivan
Mr. Mark A. Sullivan
Mrs. Eileen M. Sussmann
Mr. & Mrs. Lloyd P. Swensen
Mrs. Virginia L. Tannacore
Br. David M. Trichtinger, FSC
John & Mary Lou Voge
Mrs. Linda B. Wagner
Mr. James L. Walsh
Mr. Thomas G. Waterman
Mr. Roger P. Weinberg
Mr. & Mrs. Rudolf J. Weiss
Mr. Eugene J. Zielinski
Mrs. Roseanne N. Ziff
Mr. & Mrs. Richard Ziminski
Mr. Mark Zirnheld
Common Questions
Dear Friends of the Christian Brothers,
If you are reading this it is probably because you care about the Christian Brothers and support them. More than likely, you also support one or more of our schools and possibly several other charities. In this series, we will mention some common questions, misconceptions, and tips about giving. Some of these you may look at and say, “Well, of course!” Maybe others will make you say, “I didn’t think of that.”
If you have questions or would like to discuss any of these ideas further, please feel free to contact me, Patrick Donahue, at (732) 380-7926, ext. 112, or at donahue@fscdena.org.
*These tips are not intended to be legal advice. Before you finalize any charitable gift plan, please consult your financial and/or tax advisors to make sure it is right for your specific circumstance.
What is a CHARITABLE TRUST, and how does it differ
from a Charitable Gift Annuity (CGA)?
A CGA is a simple, one-page contract between you (as the donor) and a charity, in which a percentage of the gift is returned to you every year of your life. Alternatively, a Charitable Trust is a much more complex and flexible legal arrangement in which assets are placed under the control of a trustee for charitable purposes. There are two main types: Charitable Remainder Trusts and Charitable Lead Trusts.
What is the difference between a Remainder Trust
and a Lead Trust?
A Remainder Trust provides income to the donor (or a designated recipient), with the remainder becoming the charitable gift. A Lead Trust provides income to the charity for a designated number of years, with the remainder being returned (often to an heir of the donor).
What are some advantages of a charitable trust?
A trust allows flexibility in the size and duration of payments, and other details of the contract. When you create a charitable trust, you can control your charitable contributions while potentially significantly reducing your income tax and estate tax liability, and avoiding capital gains taxes on certain assets.
Moreover, when you create a well-drafted charitable trust, you will have a sense of certainty that the charities of your choice will receive your assets, often while you retain some benefits from the trust assets, such as income.
What are some disadvantages of a charitable trust?
Setting up and administering a Charitable Trust requires legal and financial knowledge to ensure compliance with all relevant laws and regulations. It can be complex and costly. Also, most Charitable Trusts are irrevocable, meaning once they are set up, the decision cannot be easily reversed, and assets cannot be returned to the donor. Because of their complexity and irrevocable nature, they are not suitable for everyone. If you are considering a Charitable Trust, you should consult with a professional experienced in estate planning and charitable trusts to explore your options.
These articles are not meant to be legal advice, but strictly informational. Consult your own advisors about your personal circumstances. If you have questions or would like more information, please contact Patrick Donahue at (732) 380-7926, or at donahue@fscdena.org.
Why do I keep hearing about Gift Annuities from an IRA?
For about a year now, you have probably been hearing that seniors can create a gift annuity with one or more charities (up to a total of $53,000 in 2024) from their traditional IRA account. Note: The new law also allows charitable remainder trusts. This distribution for life-income gifts can be in addition to the current $105,000 annual rollover cap, but these gifts (up to the $53,000 cap) must only be made during one calendar year.
How do I complete an IRA rollover to Gift Annuity?
It’s fairly simple. First, you contact us (or whatever charity you want to support). Then you contact your IRA plan administrator to make a one-time qualified charitable distribution (QCD) of up to $53,000. We will have a simple annuity contract created, and our annuity provider—The National Gift Annuity Foundation—will send you payments every year for the rest of your life. The remainder will be a gift to the Christian Brothers and our educational mission.
Are the ‘life payments’ to me worthwhile?
You must first remember that this is a gift, and the remainder amount goes to charity. That being said, the rates may seem quite generous. The suggested maximum gift annuity rates from the American Council on Gift Annuities are followed by 97% of charitable organizations nationwide. These are subject to change but are locked in once you make your gift. As I write this, a one-life annuity for a 75-year-old would pay 6.6% annually. For a two-life annuity, spouses being 75 & 70, payment would be 5.5%.
Is my IRA the best way to fund a Gift Annuity?
If you would like to discuss this, please give me a call. But remember, you should always consult with your own advisor before making a final decision. Some considerations are: Do you itemize your taxes? Is the amount of your planned annuity less than your Required Minimum Distribution? Do you own appreciated stock? I would be happy to speak with you about this or whatever you have questions about, with no pressure.
These articles are not meant to be legal advice but strictly informational. Consult your own advisors about your personal circumstances. If you have questions or would like more information, please contact Patrick Donahue at (732) 380-7926, or at donahue@fscdena.org.
ITEMS TO CONSIDER WHEN CREATING A WILL
First Things First:
Before I begin, I have to ask, “Have you made your will?” A nationwide study last year found that nearly 50% of Americans who are at least 55 years old DO NOT have a will. Please do not assume that the government will distribute your assets the way you would have wanted, or that they will not take a nice cut for their efforts. Even if you are not a millionaire, spending a bit of time and money to create a will can greatly increase the amount that actually gets to your heirs, and that it will go where you want it to go.
Before You Begin:
Also consider that some financial products (retirement accounts, life insurance policies, investment accounts, etc.) may offer the option of listing a beneficiary directly on the account. Designating these often saves the time and expense of going through probate.
Type of Bequest Wording:
There are various ways to designate who gets what in your will. You can make gifts of specific property (e.g., I leave my house to John), or specific dollar amounts. You can leave a percentage to each heir and charity. Also, you can leave a residuary bequest (e.g., once these are all paid, I bequeath the remainder to the Brothers of the Christian Schools, DENA.)
Highly Taxed Accounts:
Individual Retirement Accounts (IRA) are often the most heavily taxed items in your estate. Therefore, if you are leaving gifts to both loved ones and to charity, use the IRA for the charity, since they will be tax exempt. Your family could then end up with a larger gift. There is also wording you can place in your will instructing that the highly taxed products be the first items used for your charitable gifts.
I have included many of these thoughts in more detail in a brief white paper on creating wills. If you would like a copy, or would like to discuss anything on this topic, please contact me, Patrick Donahue, at (732) 380-7926, ext. 112, or at donahue@fscdena.org. Please know that my hints here are not intended to be legal advice. I always suggest that before you finalize any charitable gift plan, you should consult your advisors to make sure it is right for your specific circumstance.
Can you explain IRA giving age limits?
There are a few numbers to consider. In 2022, the age when you had to begin taking a Required Minimum Distribution (RMD) increased to 72. In 2023, it is increasing to 73, and should remain there for several years. However, you can still make a Qualified Charitable Deduction (QCD) directly to a charity beginning at age 70½. Even if you do not yet have to meet an RMD, these gifts still go straight to charity, with no taxes taken out, so you and the charity both benefit.
Reminder: A QCD gift is not taxed because it does not enter your personal income. Therefore, you cannot claim it on your tax return.
I like to give at the end of the year. Can I withdraw my RMD, then make a QCD to my favorite charity?
No. If you have funds from your IRA transferred into your own account, they will be taxed as income. You must request that your IRA provider distribute the gift directly to the charity. (NOTE: they will probably want the request in writing—letter or e-mail.)
Is making QCD gifts even worth it, if I don’t itemize on my tax return?
Definitely! If you do not itemize, it is an extra reason to use this method. You pay no taxes on the withdrawal from your IRA. The charity will get 100% of the funds. AND, you can still take your standard deduction on your tax returns.
Is it difficult to make a QCD gift to charity from my IRA?
No. Since more and more people are doing this, providers have made it much easier to take part. Just ask your account representative about the procedure.
Please remember that these articles are not meant to be legal advice, but strictly informational. Consult your own advisors about your personal circumstances. If you have questions or would like more information, please contact Patrick Donahue at
(732) 380-7926, or at donahue@fscdena.org.
Does the new SECURE 2.0 Act affect what I can give?
On December 29, 2022, the Consolidated Appropriations Act of 2022 was signed into law. Included within it was the SECURE 2.0 Act of 2022. This Act contains many new provisions for employers and employees regarding retirement savings. There are two items in particular that are meant to encourage use of IRA accounts for charitable giving, and are a modified version of a law that charitable organizations have been working to enact.
What do these two changes in the law do?
Enhance the IRA Charitable Rollover: The law permanently indexes the existing IRA Charitable Rollover amount to account for inflation. This will begin in 2024, and be the first increase in nearly 20 years. Currently, taxpayers age 70½ or older can transfer up to $100,000 annually from their IRA directly to a public charity without first having to recognize the distribution as income.
Expand the IRA Charitable Rollover: The change in the law allows seniors starting at 70½ to contribute to one or more charities, up to a total of $50,000 from their traditional IRA account, to fund a charitable gift annuity, a charitable remainder annuity trust, or a charitable remainder unitrust. The $50,000 cap can only be used in one calendar year. This distribution for life-income gifts can be in addition to the existing $100,000 annual rollover cap. The life-income provision took effect on January 1, 2023, and is permanent.
Why does the law matter to seniors?
This law will help middle-income seniors who need a lifetime income, but also want to help a charity. Just as with current charitable IRA distributions, it allows seniors to exclude these charitable distributions from income.
Are monthly donations considered “Special Gifts”?
While they do not fit the description of deferred gifts that are remembered on our Heritage Society list, we do see them as Special Gifts. That is why our monthly donors are recognized on a special list in each issue of Lasallian Notes. It is a great idea for those who do not want to forget to make their gift, and for those who would like to give more to the Brothers without a one-time larger payment each year. Dividing their annual support between twelve payments lets it fit right into their monthly budgeting.
Are monthly donors important to the Christian Brothers?
You bet! Our friends who decide to become monthly donors are some of the most generous and consistent donors we have. Their support allows us to more effectively plan our monthly income and expenses, even in months of low gift volume.
But isn’t it a lot of work to send a gift each month?
Not at all. Some of our monthly donors prefer to send a check each month. However, many take advantage of automatic billing. At the same time each month we deduct the amount requested from your credit card. They may also choose to receive only one written acknowledgement (for tax purposes), that is sent in January, and lists all of your giving during the previous year. (Those who enroll on our website, also receive an automatic e-mail notice each month when their card is debited.)
How can I become a monthly donor?
The easiest way is on our website, legacyfscdena.wpenginepowered.com. Click on the GIVE NOW button at the top right of the page. It will take you to our donation page, and the first thing you will be asked is “How often, One Time or Monthly”. Click on Monthly, enter the amount to be given each month, and fill out the rest of the page the same way you would for any gift. You are then enrolled.
If you do not have access to a computer or are uncomfortable with this process, you can contact me at (732) 380-7926, ext. 112, and we can set you up and handle your monthly gifts manually here in the office.
Most Important Reminder: Make Your Will!
I know—we all think we are going to live forever, but guess what—it isn’t up to us. DO NOT assume that the government will distribute your assets the way you would have wanted, or that they will not take a nice cut for their efforts. If you have charitable intent, it almost definitely will not happen without at least a simple estate plan.
Be Clear in How You Name the Charity: Everyone can’t be expected to know the name, official address, tax ID number (EIN), etc. for every charity they support.However, for most charities, the official name and EIN can be found on their website, or with a quick call to their office. This helps, because there are often other charities with similar names. We are the Brothers of the Christian Schools, District of Eastern North America—also known as The De La Salle Christian Brothers. Many of our individual ministries use some portion or variation of this (e.g. Christian Brothers, La Salle, De La Salle, etc.). There is even a completely different religious order from Ireland who are also known as Christian Brothers.
Unrestricted versus Restricted Gifts: If you know your charity well and have faith in their stewardship of your gift, an unrestricted gift will usually provide the most needed assistance. If there is a particular segment of their mission that you have been supporting, or feel strongly about, you may restrict your gift with wording that says you are donating for that purpose.
I have included several additional items you should know in a brief white paper on creating wills. If you would like a copy, or would like to discuss anything on this topic, please contact me, Patrick Donahue, at (732) 380-7926, ext. 112, or at donahue@fscdena.org. Please know that my hints here are not intended to be legal advice. I always suggest that before you finalize any charitable gift plan, you should consult your advisors to make sure it is right for your specific circumstance.
Is there anything special I should consider when making my year-end gifts?
Yes, there are always several things to consider, but this year there are a couple of additional thoughts.
1. As always, gifts made by December 31st can be counted toward this tax year. If you are mailing your gift, it must be postmarked on December 31st or before to count. Online gifts must be completed by 11:59 PM on December 31st. If you are ordering a stock transfer, you must allow enough time for your broker to make the transfer.
2. Of course, a gift from your IRA also must be made by December 31st. Just give your IRA holder enough notice to send the check. (Usually, a day or two is enough, but check with your account representative.) Please realize, however, if you have check-writing privileges from your IRA, your gift is not counted until it has been received by the charity, deposited, and cleared the account of your IRA holder. To be safe, you should allow about two weeks for this process.
3. While we are talking about IRAs, you may remember that in 2020 the CARES Act waived the required minimum distribution. Please note that there is no longer a waiver for the required minimum distribution for 2021.
4. Of special importance if you DO NOT itemize on your taxes: A bonus deduction of up to $300 for individuals and $600 for couples is available for cash gifts to public charities. With receipts, this can be taken above the standard deduction for non-itemizers.
5. If you make your contributions through a Donor Advised Fund, you are probably aware that you receive your charitable tax deduction when you place money into your fund. We do hope, however, that you will recommend a grant (and possibly set up a recurring grant) to the Brothers of the Christian Schools, District of Eastern North America.
6. MOST IMPORTANT YEAR-END FACT: Your year-end gift to the Christian Brothers will impact the lives of our Brothers, the 5,000 Lasallian partners working in our ministries throughout the District, and the more than 25,000 students and their families who are receiving a first-rate Christian and human education—in the tradition of our founder and for the glory of God.
Who is Part of a Legacy Society?
What types of gifts qualify me for the Lasallian Heritage Society?
Last quarter, we informed you that the Christian Brothers will begin listing the members of our Heritage Society, a way to acknowledge and thank those friends who have let us know that they have named the Brothers to receive a future gift as part of their estate or “planned giving.” If you do not see your name but have remembered us in your estate plans, please feel free to ask us to add your name.
While most of the Legacy gifts that charities receive are from donors who have listed them in their will, there are donors of several other types of
Legacy gifts that can be listed here. These include:
• Annuities. Creating a simple, one or two-page, agreement with the charity, stating you will make a gift, and receive in return a specified annual payment for the rest of your life.
• Life Insurance Policies. You may have a life insurance policy from which you will no longer need the income, so you list a charity as the beneficiary when you die. If the policy is paid in full, you could also sign the policy over to the charity, making them the owner.
• Beneficiary Designation. There are many financial products that allow you to designate a beneficiary or multiple beneficiaries who will receive any remaining funds at your death.
Examples of these include:
° Retirement Accounts. IRAs and 401(k)s are among the most heavily taxed assets if left to any individual other than a spouse, so are often one of the first assets left to charity.
° Donor Advised Funds: These accounts act like a simplified Family Foundation, allowing the donor to deposit and distribute funds to charities at their own pace. But, if funds remain in the account at your death, the charity can be pre-designated.
° Investment or Bank Accounts. Your existing accounts often have the option of naming a beneficiary so that they do not have to pass through probate.
• Trusts. There are many types of Trusts. It is best if you discuss these options with your advisors.
If you would like to discuss any of these ideas, or have your name added, please contact me, Patrick, at donahue@fscdena.org, or at (732) 380-7926 ext. 112. Please remember that my hints here are not intended to be legal advice. I always suggest that before you finalize any charitable gift plan, you should consult your advisors to make
sure it is right for your specific circumstance.
What is a Legacy Society?
A Legacy Society—sometimes known as a Heritage Society—is a simple way for charities to acknowledge and thank those friends who have let them know that they have named the charity to receive a future gift as part of their estate or “planned giving.” Here at the District of Eastern North America, the Brothers have decided to begin listing, in each issue of our newsletter, those friends who have in some way let us know that they will remember us in this way (but who have not asked to remain anonymous). Our inaugural Lasallian Heritage Society list is below.
We honor and thank these wonderful members of the Lasallian family for their lasting commitment. Please note that, over the past several years, we have been combining the records of several offices and have made every effort to include all information. Therefore, if you do not see your name but think you have already told us, please let us know so we may add you to the list for upcoming issues. If you have remembered us in your plans but have not already told us, please feel free to ask us to add your name.
Gifts of this nature often play a large part in helping charities continue and thrive, even during rough economies. We love to show appreciation to our supporters while they are still here. It is a fact, however, that most estate gifts come as a surprise to the charity after the death of the donor.
In our next issue, we will speak a bit more about the types of gifts that would include a donor on this list, many of which do not require a will. If you would like to discuss any of this before then or have your name added, please contact me, Patrick, at donahue@fscdena.org, or at (732) 380-7926 ext. 112.
Is there a way I can make a special gift today, but guarantee I have income as I grow old?
Yes, there are several. The easiest and most common is the Charitable Gift Annuity. It is a simple one or two page contract that essentially says that the donor (single or couple) will gift the charity a certain amount and receive a percentage based on your age and a standard rate set by the government, paid back annually for the rest of their life. Upon your death, the balance remaining becomes a gift to the Christian Brothers.
Are there other benefits?
Yes. You get a partial tax deduction when you make the gift and probably pay a lower tax rate on the income you receive back each year. Also, the amount of the gift is no longer included in calculations of your net worth. (This is helpful as many senior benefits are scaled based on net worth.)
Are there restrictions?
Yes. You must be at least 55 years old when you begin receiving payments and your gift must be at least $20,000.
For more information contact Patrick Donahue at (732) 380-7926 or at donahue@fscdena.org.
This article provides general information only. We suggest that you always consult your own advisors before making financial decisions. Brothers of the Christian Schools, DENA is not engaged in the practice of Law.
For the past few decades, many Americans who believe in helping others have established Family Foundations. These are legal charitable entities into which an individual or family can make charitable contributions. While the money in the Foundation no longer belongs to them, they can manage the investments and the distribution of gifts to charities. They must abide by the same regulations as other Charitable Foundations, such as the 5 percent minimum annual disbursement.
In recent years, Donor-Advised Funds (DAFs) have allowed many more individuals and families to participate in this form of philanthropy. In fact, the number of Americans who own Donor-Advised Fund accounts has quadrupled in the past five years. Today there are nearly one million DAFs. Grants to charities from Donor-Advised Funds in 2018 totaled $23.4 billion.
Let me be clear, Family Foundations and Donor-Advised Funds are both wonderful giving vehicles that give you the tax incentive when depositing, and let you make gifts as you are ready. There are distinct differences that make each right for different people. A Foundation takes longer to create, requires a much larger initial investment, pays higher taxes and fees, and usually demands much more personal time invested into its operation. However, it allows the donors (or the Trustees they appoint) to have control over the investment and distribution of funds, and makes it easier to have the entire family involved and to continue to be run by heirs after the death of the initial donor.
On the other hand, a Donor-Advised Fund is relatively easy to open. It usually requires an initial gift to the account of somewhere between $5,000 and $25,000, depending on the Sponsor (the organization holding and managing the account). In most cases they receive better tax deductions. And, they do not face the same regulations as a Foundation. In order to gain these advantages, the owners sacrifice some of the control, independence, and flexibility of a Foundation. Once the account is established, the donor can instruct the Sponsor to make a gift to a charity at any time.
Both of these vehicles have helped encourage charitable giving, and have been a huge blessing to those of us working to better the world who depend on the kindness and charitable support of others. If you have questions or would like to talk further about this, please call me, Patrick Donahue, at (732) 380-7926, ext. 112.
First Things First: Before I begin, I have to ask, “Have you made your will?” A nation-wide study last year found that nearly 50% of Americans who are at least 55 years old DO NOT have a will. Please do not assume that the government will distribute your assets the way you would have wanted, or that they will not take a nice cut for their efforts. Even if you are not a millionaire, spending a bit of time and money to create a will can greatly increase the amount that actually gets to your heirs, and that it will go where you want it to go.
Before You Begin: Also consider that some financial products (Retirement Accounts, Life Insurance policies, Investment Accounts, etc.) may offer the option of listing a beneficiary directly on the account. Designating these often saves the time and expense of going through probate.
Types of Bequest Wording: There are various ways to designate who gets what in your will. You can make gifts of specific property (e.g. I leave my house to John), or specific dollar amounts. You can leave a percentage to each heir and charity. Also, you can leave a residuary bequest (e.g. once these are all paid, I bequeath the remainder to the Brothers of the Christian Schools, DENA.)
Highly Taxed Accounts: Individual Retirement Accounts (IRA) are often the most heavily taxed items in your estate. Therefore, if you are leaving gifts to both loved ones and to charity, use the IRA for the charity, since they will be tax exempt. Your family could then end up with a larger gift. There is also wording you can place in your will instructing that the highly taxes products be the first items used for your charitable gifts.
I have included many of these thoughts in more detail in a brief white paper on creating wills. If you would like a copy, or would like to discuss anything on this topic, please contact me, Patrick Donahue, at (732) 380-7926, ext. 112, or at donahue@fscdena.org. Please know that my hints here are not intended to be legal advice. I always suggest that before you finalize any charitable gift plan, you should consult your advisors to make sure it is right for your specific circumstance.
As it became more evident this spring that the coronavirus was a true pandemic, and was not going away any time soon, Congress enacted the CARES Act on March 27th. Along with the most heavily talked about aspects—direct financial relief, enhanced unemployment benefits, and relief for small businesses—it also contained some charitable giving incentives.
For Non-Itemizers
Since the new tax laws of 2017, many more of us do not itemize. However, for this year, the CARES Act gives everyone an above-the-line deduction of $300 for charitable contributions to your favorite charities (well, actually to most charities, but I didn’t think you would want to give to the ones you don’t like). Please note that this does not include gifts to Donor Advised Funds.
Larger Gifts of Cash
This year, the law also greatly increases the percentage of adjusted gross income (AGI) limitation up to 100% for cash gifts from individual taxpayers. Generally, a deduction of up to 30% is allowed for appreciated assets, but can be added to your cash gifts to total 100%. There are also increased AGI limitations for corporate gifts and food inventory gifts.
Charitable IRA Distributions
Even though the required minimum distributions from IRAs for those 70½ or older has been suspended through the end of the year, giving directly from your IRA still remains a wonderful way to make tax free qualified charitable distributions to charity.
Please Be Careful
Unfortunately, during any crisis, the number of scams trying to get your money or your personal information jumps dramatically, trying to prey on your good nature or your fear. Please always be careful. Continue to support the charities you know, and do not be afraid to check out any new solicitations before giving. Remember, do not give (or give information) if it does not feel right, just because you are being pressured.
Let’s talk about IRAs (Individual Retirement Accounts).
For most of us, retirement accounts have either replaced or supplemented traditional pension plans. They allow you to make before-tax deposits and pay no taxes until you withdraw. This is a great deal, but sometimes paying taxes upon withdrawal can affect your income level for the IRS, Medicare, etc. Remember, the IRS says you must begin annual withdrawals at age 70½, even if you do not need the income. In considering your own personal charitable giving, there are two questions to consider about your IRA.
Is making a charitable gift from my annual IRA withdrawal right for me?
Last year, Congress finally passed a permanent law allowing you to make charitable gifts (totaling up to $100,000) directly from your traditional IRA. The gift goes directly to the charity without even entering your income stream, therefore not affecting your income level. This can be a very nice advantage, especially for those who do not itemize, or who have concerns about not increasing their household income. More and more donors are now using this option, so most account providers are now making it very easy to gift all or any portion of your annual payment to a charity or charities. (Reminder: certain types of accounts, such as a SEP-IRA for example, are not eligible for this benefit.)
Should I leave my IRA to my heirs—keeping it with loved ones, and bequeath cash, stocks, or other property to charity?
The simple answer is “NO!” As a matter of fact, your heirs will probably be much better off if you reverse that asset distribution. Retirement funds are often the most highly-taxed portion of an individual’s estate. Often being subject to income and, in many cases, estate and other taxes as well. Your heirs will usually come out much further ahead if you pass retirement funds to charity tax-free, and reserve other less highly-taxed assets for them.
I have been told many times, “I would like to make a special gift, but I am worried about having income in my later years.” An annuity can be a simple answer. The Brothers of this District (DENA) now have the ability to offer Gift Annuities. A gift annuity is a simple one or two page contract that basically says that the donor (single or couple) will gift the charity a certain amount, and receive a percentage paid back annually for the rest of their life. It is usually a generous percentage, based on your age and a standard rate set by the government.
It is quite common for a donor, even a business-savvy one, to make a generous gift by writing a check, without considering whether a stock gift would be more beneficial for his or her tax purposes. If you have greatly appreciated stock (worth much more now than you paid for it), you can transfer the stock to a charity. You will pay no capital gains, and can take a write-off for the full current value of the gift. (Hint: If you think the stock will continue to grow, you can re-purchase the same amount. Now your cost-basis will be at today’s value.)