Tuesday, April 15, 2014

Give to God and Caesar

By: Barry G. Allen- President & CEO 

Legacy giving by us Christians is unique and distinct because it is a spiritually motivated, not a tax motivated decision.

However, much of the legacy giving in the USA is driven by tax avoidance, not biblical stewardship principles. As Americans we still enjoy the most favorable tax system in the world in terms of encouraging and facilitating charitable giving. So without question we should seek to maximize the available tax benefits in our giving. But, at the end of the day we christians must recognize we shall be held accountable by God for how we steward what He has entrusted to us. And, a legacy gift is a gift you can’t put in the offering plate; it is a gift out of your assets, not your income, and it is made in light of your overall estate and financial plans.

It is important to remember charitable giving in America preceded all of our current tax systems. Many charitable organizations were created and continuously funded through generous outright gifts, bequests in wills and life income gifts before the establishment of the modern federal income tax in 1913, the federal estate tax in 1917 and the federal gift tax in 1935.

I am pleased to acknowledge those whom the KBF has had the privilege of assisting have demonstrated their primary motivation to give was not the tax savings opportunities, but the opportunities to make an impact, to make a lasting difference, to leave a legacy of their love for Christ and His mission in this world through their churches and other christian ministries near and dear to their hearts.

Having said that, taxes can play an important role in the size and the timing of legacy gifts. Inherent in the mission of the KBF is to facilitate the making of legacy gifts by simplifying the process and ensuring each giver is maximizing the tax savings opportunities available. To that end the KBF makes available to all Kentucky Baptists confidential estate and charitable gift planning consultation.

Please call toll free Laurie Valentine, our trust counsel, for assistance in fulfilling the teaching of Jesus to “give to Caesar what is Caesar’s and to God what is God’s” (Matthew 22:21).

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, April 10, 2014

Twelve Steps For Christian Estate Planning- Step 4

By: Laurie Valentine- COO & Trust Counsel

A Christian estate plan is one you develop by determining how God wants you to: (1) provide for your family and other “dependents” at your death and (2) have your finances managed and decisions made for you if you became incapacitated and no longer able to do those things for yourself.

Step #4 Plan Your Use of Joint Ownership. Many people put everything they own in joint ownership with others so that, at death, no probate court proceedings are required for the other joint owner to have full ownership and control of the assets. “Joint tenancy with rights of survivorship” titling does avoid probate, but should be used carefully.

Your Will does not control jointly-owned assets. That means that even with a carefully thought out “written plan” (a Will) for asset distribution at death, any assets in joint names will not be governed by that plan.

Putting others’ names on your assets as joint owner makes them just that…an owner with rights in those assets. That could result in those assets being subject to the claims of that other joint owner’s creditors, if he or she gets into some kind of legal or financial difficulty.

And, if the other joint owner dies first you could be taxed on receiving your own assets back from the other joint owner at their death.

Next Month-Step #5 Make Provision for Each Intended Beneficiary.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, April 3, 2014

Retirement Planning with a Charitable Twist

By: Laurie Valentine- COO & Trust Counsel


Cutbacks in the potential to make deductible retirement plan and IRA contributions have left many executives and professionals looking for tax relief in their highest earning years. Many are also looking for a supplementary retirement savings vehicle that permits tax-free growth of their nest egg.

A “retirement unitrust” may be the right planning tool for such individuals, if they are motivated to benefit charitable causes, as well as themselves.

A “retirement unitrust” is a charitable remainder trust that pays the lesser of the net income generated by the trust assets or the unitrust amount (designated percentage of trust asset value, as revalued each year) until a triggering event designated in the trust agreement converts (flips) the trust into a standard charitable remainder unitrust. The benefits of this plan are: a current income tax deduction equal to the present value of charity’s future remainder interest; lower income until the donor retires; possibly substantial “supplemental” retirement income; and a significant ultimate gift to one or more charitable causes.

Here’s an example: Dr. John Brown, age 50, transfers assets worth $100,000 to a unitrust that will pay him the lesser of the net income or 5% annually (the “unitrust amount”) until 2032 when he will turn 68 (the “triggering event”), at which time the unitrust will “flip” (convert) to a standard unitrust paying him 5% each year. The value of his charitable gift is $26,400. If his $100,000 gift is invested to produce an average annual return of 2.5% yield (income) and 5% capital appreciation until the triggering event, the trust will grow to $244,500 by 2032. His unitrust income will also take a big jump from $3,685 in 2031 to $12,030 in 2032, with potential for that to increase as the value of the trust assets increase in later years.

Dr. Brown can also add to the unitrust in future years---think “charitable IRA”, but without the ceiling on contributions an IRA has---entitling him to additional income tax deductions equal to the value of the charity’s remainder interest in the additions.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.


Tuesday, April 1, 2014

Love is Something You do

By: Barry G. Allen- President & CEO

When I think of this special couple we were able to assist in stewarding their estate, I am reminded of all the ways across the years they have demonstrated their love for Christ, their children and grandchildren, their church and their local community. They will be among the sheep to which the King will say, “Come, you who are blessed of my Father; take your inheritance, the kingdom prepared for you since the creation of the world. For I was hungry and you gave me something to eat …Then the righteous will answer Him, when did we see you hungry and feed you … The King will reply, I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me.” (Matthew 25:34-40).

This couple is the epitome of Kingdom-minded stewards who love Christ and show it with their time, talents and treasurers. For them, love is not something about which they talk, it is something they do.

When they decided to move from the farm to town, they sought the assistance of Laurie Valentine, our trust counsel, to work with their own legal and financial advisers in exploring ways of making a legacy gift as part of the sale of the farmland on which they lived. The ultimate plan was a win for them, a win for their family and a win for their church.

They donated, prior to the sale, a portion of the appreciated farmland on which they lived to a charitable trust for which the KBF is the trustee. The trust received that portion of the sales proceeds, and they received the balance. From the trust they will receive income for the rest of their lives. At the death of the second to die, the remainder in the trust will establish an endowment that will provide a perpetual stream of income to their church. In addition to the joy they experienced in knowing they were making a lasting difference in the world for the cause of Christ, they also received the following tangible benefits: an income tax deduction which can be used over a total of six years, reduced the capital gains tax on the real estate sale and converted the real estate into income for both of their lifetimes.

Remember, “love is something you do.” Please give us the privilege of assisting you. 

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, March 25, 2014

Stewardship Truths #3

A 12 part series discussing stewardship.

By: Barry G. Allen



Demonstrate your dependence upon and dedication to God through your giving.

Proverbs 3:9 “Honor the Lord with your substance….”

The root meaning of the word “honor” is “heavy,” or “to weigh.” It suggests God is to have great significance, or to weigh heavily, in our lives – and – we are to show it by how we give.

The word substance is an all inclusive term; it includes our stocks, bonds, life insurance, real estate –everything.

Most christians have never even considered tithing the value of their substance, their accumulated wealth.

Tuesday, March 18, 2014

Legacy Giving Through the CP

By: Barry G. Allen- President & CEO

Since the inception of the Kentucky Baptist Foundation in 1945 there have been those who chose the Cooperative Program as an object of their legacy gifts. For them it was the simplest and most efficient way to express their love for Christ and his mission in this world through the various missionary, educational and benevolent ministries of the Kentucky Baptist Convention and the Southern Baptist Convention.

Today, the earnings from the combined endowments for which the CP is a beneficiary represents the second largest source of CP giving through the KBC. Only one church gives more. The difference is CP endowment giving is perpetual.

Traditionally, the CP is supported primarily by the collective giving of the churches. However, there are ways individuals, not just churches, can support the CP directly through the Kentucky Baptist Foundation. Let me encourage you to consider prayerfully one or more of those ways. Cooperative Program Sunday is April 13, which provides a timely occasion for you to begin your consideration.

If your goal is to make a gift at death, then consider a bequest in your will or a beneficiary designation of life insurance or retirement assets. If your goal is to avoid capital gains on the transfer of real estate, then consider a real estate gift. If your goal is to avoid the potential double taxation at death of your retirement assets, then consider gifting those assets at death. If you goal is to make a simple gift now, then consider an outright gift of cash or appreciated securities. If your goal is to make a gift larger than you ever dreamed possible, consider a life insurance gift. If you desire flexibility in timing the decision as to what charities will benefit from your gifts versus the tax advantaged timing of your gifts, consider a donor advised fund. If your goal is to make a gift now, but receive in return a fixed income for life, consider a charitable gift annuity. If your goal is to make a gift now and create a hedge against inflation over the long term, then consider a charitable remainder unitrust. If your goal is to reduce the cost of passing assets to your heirs, then consider a charitable lead trust.

A legacy gift to the KBF for the perpetual benefit of the CP is an investment with eternal implications that will be working literally 24/7 to connect people all over the world to Jesus Christ. Please call us toll free to assist you.

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, March 11, 2014

Twelve Steps For Christian Estate Planning- Step 3

By: Laurie Valentine- COO & Trust Counsel

A Christian estate plan is one you develop by determining how God wants you to: (1) provide for your family and other “dependents” at your death and (2) have your finances managed and decisions made for you if you became incapacitated and no longer able to do those things for yourself.

Step #3 Coordinate Your Plan. Efficiently and effectively accomplishing God’s plans for how your assets are to pass at your death requires you put together a “coordinated” plan for how they will pass.

Assets that are beneficiary-designated such as life insurance and retirement accounts will pass per the terms of the beneficiary designation document, not per the terms of your Will. Likewise, jointly-owned assets will pass to the surviving joint owner at your death, no matter what your Will says.

Only assets in your name alone or designated to be paid to your estate pass as your Will directs.

Failure to coordinate how assets will pass may result in a beneficiary receiving assets in a way you did not intend. Example: it is your intention anything passing to your son at your death is to be held in trust for him until he is 25. Your plan includes both a bequest to the trust in your Will and a life insurance beneficiary designation naming your son as beneficiary. The bequest will be placed in trust, but the life insurance will be paid directly to your son, whether he has reached age 25 at the time of your death or not.

Next Month-Step #4 Plan Your Use of Joint Ownership. 

For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.