Opera Conference 2011

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Slides from my Planned Giving presentation at Opera Conference 2011.

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Opera Conference 2011

  1. 1. Planned Giving: Demystified Opera Conference 2011 Boston, MA Delivered by Tony Martignetti, Esq. Martignetti Planned Giving Advisors, LLC May 7, 2011
  2. 2. Where We’re Headed <ul><li>• What is Planned Giving </li></ul><ul><li>• How is Planned Giving done </li></ul><ul><li>• Continuing Ed. </li></ul>
  3. 3. What is Planned Giving <ul><li>A method of charitable giving that involves the donor’s consideration of their retirement plan and family estate plan, and </li></ul><ul><li>Usually (not always) accrues cash to a non-profit at the donor’s death </li></ul>
  4. 4. How is Planned Giving Done <ul><ul><li>• Revocable gifts (your donor can take it back) </li></ul></ul><ul><ul><li>-- very valuable to your program </li></ul></ul><ul><ul><li>Charitable bequests </li></ul></ul><ul><ul><li>Beneficiary designations </li></ul></ul>
  5. 5. Charitable Bequests <ul><li>• Open to property or cash </li></ul><ul><li>• Popular, in fact, most popular </li></ul><ul><li>• Except, unlikely you’ll be told </li></ul><ul><li>• Residual estates hold a lot of wealth </li></ul><ul><li>• A deduction for estate? </li></ul><ul><li>• Comfortable, it’s an easy gift to make </li></ul><ul><li>• Oh, beautiful for modest income members </li></ul><ul><li>• No lifetime cost </li></ul><ul><li>• Fine place to start your Planned Giving program </li></ul>
  6. 6. Beneficiary Designations <ul><li>• Life Insurance </li></ul><ul><li>• Retirement plans </li></ul><ul><li>IRA, 401(k), 403(b), Small Employer Pension (SEP), SIMPLE IRA </li></ul><ul><li>• Commercial annuities </li></ul><ul><li>• Bank and brokerage accounts </li></ul><ul><li>• Any asset with a beneficiary designation </li></ul><ul><li>• Another good place to start your Planned Giving </li></ul>
  7. 7. Where We Are <ul><li>√ What is Planned Giving </li></ul><ul><li>√ How is Planned Giving done </li></ul><ul><li>√ Revocable gifts </li></ul><ul><li> Irrevocable gifts </li></ul><ul><li>pay life income </li></ul>
  8. 8. Irrevocable Gifts That Pay Life Income Donor donor’s death Company lifetime income cash, stock, real estate (?) planned gift
  9. 9. The Life Income Gifts (a/k/a love those acronyms) <ul><ul><li>• Charitable Remainder Trust (CRT) </li></ul></ul><ul><ul><li>Fixed income--Charitable Remainder Annuity Trust (CRAT) </li></ul></ul><ul><ul><li>Variable income--Charitable Remainder Unitrust (CRUT) </li></ul></ul><ul><ul><li>• Charitable Gift Annuity (CGA) </li></ul></ul>
  10. 10. Charitable Remainder Annuity Trust <ul><ul><li>• Fixed income for life to donor or any “income beneficiaries” </li></ul></ul><ul><ul><li>--husband and wife is typical </li></ul></ul><ul><ul><li>• Based on a fixed percentage of trust assets valued once, at the beginning </li></ul></ul><ul><ul><li>-- must pay at least 5% </li></ul></ul><ul><ul><li>• Charitable income tax deduction </li></ul></ul><ul><ul><li>• No additional contributions to trust </li></ul></ul><ul><ul><li>• At death of income beneficiaries, remainder is a gift to company (& other nonprofits?) & trust closes </li></ul></ul><ul><ul><li>• Can also be for set number of years rather than lifetime </li></ul></ul>
  11. 11. Charitable Remainder Unitrust <ul><ul><li>• Variable income for life to donor or any “income beneficiaries” </li></ul></ul><ul><ul><li>--husband and wife is typical </li></ul></ul><ul><ul><li>• Based on a fixed percentage of trust assets revalued every year </li></ul></ul><ul><ul><li>-- must pay at least 5% </li></ul></ul><ul><ul><li>• Charitable income tax deduction </li></ul></ul><ul><ul><li>• Additional contributions allowed </li></ul></ul><ul><ul><li>• At death of income beneficiaries, remainder is a gift to company (and other non-profits) & trust closes </li></ul></ul><ul><ul><li>• Can also be for set number of years rather than lifetime </li></ul></ul>
  12. 12. Charitable Gift Annuity <ul><ul><li>• Fixed income for life to donor and another, or any 2 “annuitants” </li></ul></ul><ul><ul><li>--husband and wife is typical </li></ul></ul><ul><ul><li>• Based on a fixed percentage of initial gift </li></ul></ul><ul><ul><li>• Charitable income tax deduction </li></ul></ul><ul><ul><li>• At death of annuitants, remainder is a gift to company only </li></ul></ul><ul><ul><li>• Deferred Charitable Gift Annuity: income starts in future </li></ul></ul><ul><ul><li>• Substantial web of state regulation in CA, NJ, NY, others </li></ul></ul>
  13. 13. Where We Are <ul><li>√ What is Planned Giving </li></ul><ul><li>√ How is Planned Giving done </li></ul><ul><li>√ Revocable gifts </li></ul><ul><li> Irrevocable gifts </li></ul><ul><li>√ pay life income </li></ul><ul><li>don’t pay life income </li></ul>
  14. 14. Irrevocable Gifts That Don’t Pay Life Income <ul><ul><li>• Charitable Lead Trust (CLT) </li></ul></ul><ul><ul><li>• Retained Life Estate </li></ul></ul><ul><ul><li>• Charitable IRA rollover </li></ul></ul>
  15. 15. Charitable Lead Trust Heirs income for period of years or life Company close of trust cash, stock, real estate from Donor Lead Trust
  16. 16. Retained Life Estate <ul><li>• By deed to company, at death </li></ul><ul><li>• Oh! Report upfront, immediate deduction </li></ul><ul><li>• Surrendering “remainder interest” </li></ul><ul><li>• Taking “life interest” </li></ul><ul><li>• OK, donor pays taxes, maintenance, insurance, repairs </li></ul><ul><li>• Not just primary residence </li></ul>
  17. 17. Charitable Lead Trusts fixed or variable income <ul><li>Charitable Lead Annuity Trust (CLAT) </li></ul><ul><li>• Donor cannot add to it </li></ul><ul><li>• Fixed rate (percentage) for income to company </li></ul><ul><li>• Fixed dollar amount of income each year </li></ul><ul><li>Charitable Lead Unitrust (CLUT) </li></ul><ul><li>• Donor can add freely </li></ul><ul><li>• Fixed rate (percentage) for income to company </li></ul><ul><li>• Variable dollar amount of income each year due to annual revaluation </li></ul>
  18. 18. Charitable IRA Rollover <ul><li>• This year only </li></ul><ul><li>• Donors over 70 1/2 </li></ul><ul><li>• Up to $100,000/person, multiple charities </li></ul><ul><ul><li>--Double for couples </li></ul></ul><ul><li>• Really, it’s a “qualified charitable distribution” </li></ul><ul><li>• Refer donor to IRA custodian for form </li></ul><ul><li>• I have 2 extensive blog posts: http://www.mpgadv.com </li></ul>
  19. 19. Where We Are <ul><li>√ What is Planned Giving </li></ul><ul><li>√ How is Planned Giving done </li></ul><ul><li>√ Revocable gifts </li></ul><ul><li>√ Irrevocable gifts </li></ul><ul><li>√ pay life income </li></ul><ul><li>√ don’t pay life income </li></ul><ul><li>• Continuing Ed. </li></ul>
  20. 20. Continuing Ed. <ul><li>• Tony Martignetti Nonprofit Radio, The Martignetti Report , blog, LinkedIn, Twitter, Facebook </li></ul><ul><li>-http://www.mpgadv.com or scan: </li></ul><ul><li>-slides are there now: “Opera” post </li></ul><ul><li>• American Council on Gift Annuities (acga-web.org) </li></ul><ul><li>• Book: Planned Giving Simplified , Robert Sharpe, Sr., published by Wiley </li></ul>

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