All Posts in "Legacy"

woman signing a checkMany people put off making gifts until the end of the year.  If you want to make a charitable gift and be able to deduct the gift in 2011, timing is critical.

The requirements for making a year-end charitable gift by check or credit card effective for the current calendar year are relatively simple.  A gift by check will be effective for 2011, if you sign the check and place it in the mail or deliver it to the charity by Dec. 31.  As long as the check is paid in ordinary course, the gift is effective as of the date of mailing or delivery even if not actually cashed until the following January.

Similarly with a credit card, the gift is effective when the charge is made on the card owner’s account.  Because credit card charges are normally created immediately by electronic debit, it should be possible to make a gift by credit card as late as Dec. 31.  Credit card charges at year-end are deductible even though you will not receive the bill and make the payment until the following year.

In many cases it is also possible to make gifts of stock late in the year.  The best option if you hold stocks in a brokerage account is to have the charity create an account with the same brokerage firm.  In that case, the transfer can be made immediately from your account to the charity’s account.  If you hold stock certificates, it is possible to endorse the certificates and deliver them to a local charity in person.  If the charity is not local, you can send the stock certificates in one envelope and a form called a “stock power” in a separate envelope.  As long as both envelopes are postmarked before the end of the year, the gift will be effective.

It is also possible to transfer real estate to charity late in the year, but in most cases you will need to allow sufficient time for an attorney to draft the deed and for the charity to complete its acceptance process.  Once signed and notarized, the deed can be delivered to the charity prior to the end of the year to make the gift effective.
If your gift will be in the form of a charitable gift annuity or charitable trust instead of an outright gift, you will need to allow more time for the appropriate documents to be drafted.  It may be possible to implement a charitable gift annuity during the last week of December, but a charitable trust would almost certainly need to be started before Christmas.

If you want to make a charitable gift, but have not yet decided on a charity, consider a gift to a donor advised fund.  This allows you to receive the deduction for 2011, but select your charitable recipient in 2012.

Amy Lewis is an attorney with Eisenhower, Carlson, PLLC, in Tacoma. She specializes in charitable gift planning, estate and tax planning. Please consult a qualified estate planner before making a charitable gift.

Amy Lewis by — December 21, 2011 in Everything Else

When you hear that there are people in the 35 percent tax bracket, you may wonder what it means. It means their annual (adjusted) gross income is $200,000 for individuals or $250,000 for couples.

For those who make a gift to a favorite charity, the 35 percent bracket also means that for every $100 they give, their taxes will be reduced by $35.
Faced with serious deficits, Congress is weighing a proposal that would cap that tax credit at $28 per $100 for wealthy individuals. There is plenty of debate about how this would affect charitable giving.

If Congress approves the cap, the Center for Philanthropy at Indiana University says it might reduce giving by 2.3 percent over the next two years. That would mean charities across the nation will receive $3-5 billion less.This concerns all nonprofit.

They worry that they will have to cut local programs succh as provide job training, home care for the elderly, or health care for the uninsured. With more than 46 million Americans living in poverty, and many federal programs also facing budget cuts, that cost-benefit seems out of whack to most non-profit leaders.

Tax brackets aside, most Americans give to charities for other reasons. It is deep in our culture, a tradition born deep in our history. When he traveled here in 1831, the French philosopher Alexis de Tocqueville noticed something remarkable. Americans, he said, never turn their backs on a neighbor in need. He saw people helping each other recover from floods, fires and other disasters.

Since Tocqueville’s visit, Americans have become more artful in the way they give. Today, many donors—even those not in the 35 percent bracket—aim their gifts at specific needs, and most nonprofits, from food banks to museums to job training programs, will welcome your questions about that idea.

Mike Robinson is Senior Vice President for Planned Giving at United Way of Pierce County. Please consult a qualified tax attorney before making a charitable gift.

Contributing Author by — November 23, 2011 in Everything Else

Colby Parks

Tragically, the most senior and respected members of our community, our parents and grandparents, occasionally even great-grandparents, are the victims of exploitation by the most unseemly of suspects: their children.

Amazingly, family members often sue senior relatives out of greed or fear of losing “their inheritance,” and seek a court’s order to take away their relative’s most important civil rights: their right to vote, control their own affairs, make their own decisions, associate with people of their own choosing, even the right to make their own Last Will and Testament.  In elder law, we refer to these matters as “guardianship cases”.  A guardianship case is nothing less than a lawsuit seeking to deny a person their rights.  Regardless of age, we all should take appropriate measures, through effective estate planning, to avoid a guardianship case if at all possible.

There are many sad occasions when a guardianship is necessary.  For example, if a person suffers  a stroke and becomes unable to manage their affairs (in the absence of prior estate planning), a guardianship may be necessary.  Should an adult develop Alzheimer’s (again, in the absence of prior estate planning) then a guardianship may be necessary, so that appropriate decisions, and accountability for those decisions, may be acted upon.  Still, as noted, with prior and effective estate planning, a guardianship case and its inherent costs –which can easily exceed $5,000–and the corresponding loss of independence, can be avoided.

One of the most effective, non-legal planning tools, is frequent and open family communication.  Adult children and their parents and/or grandparents, etc., have to discuss family matters as we grow old together.  Many of us who practice in this area have had to deal with children who call a lawyer before they talk to their mother or grandfather.  Such action is tantamount to starting a railroad engine moving down the track with virtually no mechanism to stop the train.
In addition to open and honest channels of family dialogue, we should utilize durable powers of attorney, trusts, and health care directives to establish the who, what, and when of determining how we control our own lives.

A. Colby Parks is an attorney specializing in elder law in Tacoma, Washington. Please consult a qualified estate planner before creating a will.

Contributing Author by — November 15, 2011 in Everything Else

What do a P-51, a concert violin, a toy train collection and an old beach cabin have in common?
All four were turned into creative gifts to charity, made in lieu of cash.

That’s right. Your favorite nonprofit might be the best place to give things you had never considered giving them, because you figured what they need most is cash to sustain their missions.

What sorts of things?  Maybe your spouse collects vintage baseballs, but none of your daughters wants to inherit them.  Maybe you inherited a beach cabin back in Minnesota, but you never use it.  Maybe you wound up with a classic Dusenberg that is gathering dust in a garage.

The best market for memorabilia is usually another collector.   If you donate them to a favorite charity instead, three good things happen.  The charity sells them for cash, you may receive a tax break, and those baseballs still wind up in the hands of someone who loves them.

Likewise, that old cabin on the lake you feel guilty for neglecting can provide a hefty gift to charity, allowing you to hang on to other assets for your own use.   This makes a lot of sense, especially when other assets have declined in value.

You also receive a subtle bonus when you turn a keepsake into a charitable gift.  If you simply sell it, you might suffer seller’s remorse.  Giving it to charity triggers a ripple effect.   That concert violin might fund a scholarship for a music student.   That vintage car might provide job training for someone struggling to find work.

Check the attic.  What you thought was part of your dusty past may have a future.

Mike Robinson is Senior Vice President of Planned Giving at United Way of Pierce County. Please consult a qualified estate planner before making a charitable gift.

Contributing Author by — October 26, 2011 in Everything Else