Wednesday, April 20, 2016

Choosing a Trustee

By: Laurie Valentine

A trust can be a helpful estate planning tool.

Whether you are using a revocable living trust as part of your plan for management of assets in the event of incapacity or an irrevocable trust for tax planning, one of the most important decisions is your choice for trustee.

Under Kentucky law, the trustee may be an individual or a bank, trust company or other entity that has trust powers. An individual serving as trustee does not have to be resident of Kentucky nor do they have to be related to you.

Think about the types of assets that are, or may be, in the trust. You will want to name a trustee that understands the management of those types of assets, knows about taxes, investments and financial matters.

The trustee should be someone who is a self-starter. There is little supervision of the management of a trust. Your choice should be someone that will not neglect their responsibilities due to lack of time, interest or knowledge.

Don’t just assume the person or entity you wish to name as trustee is willing to serve. Ask them before you complete your planning and, if possible, allow them to review the trust agreement before it is signed.

Finally, make sure that you have selected a trustee who can be objective. Trustees must make decisions that affect the interests of both the income beneficiaries and the remainder beneficiaries. While family members may be appropriate choices, in some cases you may need to consider a professional, corporate or institutional trustee. Corporate trustees are accountable not only to the beneficiaries of the trust, but also to their own management, directors, auditors and other examiners.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

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 5, 2016

Senior Celebration

By: Richard Carnes

Annually the Kentucky Baptist Convention conducts a wonderful multi-site event entitled Senior Living Celebrations for Kentucky Baptist senior adults. This year’s theme is Armored For Victory, based on the scripture passage of Ephesians 6:13-18. Attendees will have the opportunity to participate at either FBC Madisonville on April 18, Severns Valley Baptist Church on April 19 or FBC Richmond on April 21. The Kentucky Baptist Foundation is honored to again sponsor the breakfast at each celebration and provide leadership for one of the workshops that will be offered during this event.

This popular Kentucky Baptist Convention event is always well attended by enthusiastic senior adults who come to worship, learn and celebrate life together. This year, there will be over a dozen workshops at each location, covering topics such as tips on physical well-being, growth in prayer, navigating Medicare, missions and ministry opportunities for seniors, travel tips for your next senior adult trip, and more.

The Kentucky Baptist Foundation’s trust counsel, Laurie Valentine, will lead an excellent workshop session titled “Who Will Be in Charge If”, which explores what happens without planning for possible future incapacity. The session will detail the essential aspects of key incapacity planning tools including Powers of Attorney, Healthcare Advance Directives, and Living Trusts. Why is this topic so important? We should anticipate and plan for the possible event of an accident or an illness that leaves us incapable of making decisions for ourselves and incapable of managing our finances. Laurie’s seminar on this topic will equip you with the understanding of key documents you can put in place to ensure that should an incapacity occur, you and your loved ones will be properly cared for and the individuals you’ve selected to act on your behalf have the necessary authorization.

Laurie and I hope to see you at one of the upcoming Senior Living Celebration events so you too can be armored for victory. Come join us for breakfast and be sure to attend one of Laurie’s workshop sessions during the day. If you are not able to attend, you may always contact us directly to discuss how best to organize your estate planning goals to achieve your personal and charitable objectives to support your church and other Baptist causes. To learn more, you may contact Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

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.

Wednesday, March 23, 2016

Support Until The Lord Returns

By: Laurie Valentine

You do not have to be wealthy to be able to set up a plan that will provide financial support until the Lord returns to charitable causes that are important to you.

Providing ongoing support for your church; state, national and/or international missions; ministries to hurting children and their families; disaster relief; and/or other causes can be accomplished through the creation of a new endowment fund or by making gifts to an existing endowment fund.

An endowment fund is a permanent, perpetual fund managed either by the cause benefited by your gift or another entity such as the Kentucky Baptist Foundation. Only the earnings from the endowment fund are distributed for use by the cause(s) you name as beneficiaries; the original value of what you give is never distributed.

A large gift is not required to establish an endowment fund with the Kentucky Baptist Foundation. It can be started with any amount and you can add to it from time to time over your lifetime. This permits even those of modest means to do much more than they ever dreamed possible. As the endowment fund grows, more lives will be touched and blessed through the support provided.

Establishing (or adding to) an endowment fund during your lifetime may provide income tax savings if you itemize deductions and capital gains tax savings if you use appreciated assets to fund your gift.

All good things come from God. Establishing an endowment fund, whether through a single large gift or a lifetime of more modest levels of giving, permits you to demonstrate your gratitude for God’s blessings and your desire to be involved in touching lives in His name.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

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 8, 2016

Serving With A Great Board

By: Richard Carnes

As CEO of the Kentucky Baptist Foundation (KBF) I am honored and blessed to be supported and guided by an excellent board of directors. The sixteen men and women who serve as directors of the KBF are elected by the Kentucky Baptist Convention messengers during the KBC’s annual meeting. All of these individuals are active members in their local Kentucky Baptist church and they each bring unique professional experiences to the financial stewardship ministry of the KBF.

A nonprofit board member plays a vital role in the ongoing success of an organization’s ministry. While each organization has unique characteristics, nonprofit boards usually have decision-making responsibility on strategy, direction, policy and governance. A board’s scope of responsibility normally includes:

· Defining the organization’s mission and goals, and making decisions on strategy.

· Monitoring organizational performance to confirm the organization is being managed capably and there is accountability for the organization’s operations and results.

· Providing effective stewardship of the organization’s resources.

· Overseeing the stability of the organization in critical areas, including financial statement integrity and internal risk systems and controls.

· Recruiting, selecting, supporting and assessing the organization’s chief executive.

· Evaluating and strengthening the board’s effectiveness.

· Enhancing the organization’s public image and generating support for its activities.

Directors of a nonprofit organization such as the KBF have fiduciary duties and thus have the responsibility to protect and preserve the organization’s resources for the ministry and charitable purposes for which the organization was established. This means that the directors accept a stewardship role over the KBF’s assets to confirm that resources are utilized in a reasonable and appropriate way. As persons of trust, board members have the authority and obligation to act prudently, honestly and in good faith on behalf of their nonprofit entity.

Kentucky Baptists can be assured that the KBF’s board of directors and staff work diligently to fulfill its stewardship duty in all facets of its work. The Kentucky Baptist Foundation is honored to work with Kentucky Baptist families that are seeking how best to organize their estate planning goals to achieve their personal and charitable objectives in support of their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org

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.



Wednesday, February 24, 2016

Flexible Life Income Gift

By: Laurie Valentine

Are the “minimum distribution rules” requiring you to take more from your IRA than you currently need for living expenses? Are you interested in establishing a charitable gift plan that will ultimately provide a significant gift to one or more charitable causes, while allowing you to “tap in” to an income stream at a later age?

A “flexible deferred charitable gift annuity” may be the way to solve your problem and accomplish your charitable giving objectives.

A deferred charitable gift annuity is gift plan in which a charity agrees, in exchange for a gift of cash, appreciated securities or real estate, to make fixed payments to the giver and/or one other person for their lifetime(s) beginning at least one year and one day after the gift is made. At the death of the “life income” beneficiary(s), whatever remains is paid out to the charitable cause(s) the giver designated.

While the annuity payments don’t start for a year or more, the giver is entitled to a charitable income tax deduction in the year the gift is made to the charity.

A “flexible deferred charitable gift annuity” offers an additional benefit. Instead of designating a particular, unchangeable start date for the annuity payments, the flexible gift annuity contract reserves to the giver the right to postpone the decision about the actual annuity payment start date until later.

Your charitable income tax deduction will be determined using the earliest date on which you can “turn on” the annuity payments. And, the annuity payment amount will vary depending on when you elect to start the payments…the longer you wait, the higher the annuity payment amount.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

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, February 11, 2016

Gifting Real Estate

By: Richard Carnes

Laurie Valentine, trust counsel for the Kentucky Baptist Foundation and I had the recent pleasure of visiting with a husband and wife that were seeking guidance on what steps they should take to enable them to gift real estate property to create an endowment fund which would benefit two Kentucky Baptist causes they faithfully supported. The wife of this couple attended one of the Foundation’s legacy giving seminars a few months ago and was inspired to think about the Christian stewardship of their cash assets and non-cash assets (home equity, life insurance, retirement assets, investments or business interests). During our seminars we share with the participants that the average person’s net worth consists of 9% in cash and 91% in non-cash assets. When hearing this statistic, participants are enlightened that their financial stewardship covers more than just the 9% of their cash assets.

As Laurie and I spoke with this couple, we acknowledged that cash is the most common form of charitable gift for most people. However, by giving property, a donor may receive greater tax benefits and conserve cash for other uses. Also, the donor may find that they can sometimes make a larger gift at less after-tax cost by giving real estate or other non-cash property.

Most types of marketable real property may be given. Personal residences, farms, vacation homes, undeveloped land, and rental property are common sources. And, it is possible to give either all or a portion of the property’s value. The property should be readily marketable, especially if the donor plans to make the gift if the form of a life income arrangement.

Giving real property is handled by deeding the property to a charitable organization such as the Kentucky Baptist Foundation. Our staff, along with a donor’s professional advisor can help evaluate the benefits of gifting real estate as well as providing guidance in securing an appraisal and other steps.

Charitable gifts of real estate often involve more tax and legal complexities than other types of donations. Over the years, however, such gifts have provided substantial benefits to both the donors and the charity. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866)489-3533; KYBaptistFoundation.org

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.

Wednesday, January 27, 2016

Charitable IRA Rollover-Permanent

By: Laurie Valentine

The Protecting Americans from Tax Hikes Act enacted in December 2015 (the “Act) includes a permanent extension of the Charitable IRA Rollover provisions first enacted in 2006. Those provisions allow certain Individual Retirement Account (“IRA”) owners to use taxable IRA funds to make charitable gifts without negative tax consequences.

Generally, distributions from an IRA, whether to the IRA owner or another person or organization, must be included as part of the IRA owner’s taxable income.

The Charitable IRA Rollover provisions permit a person who is 70 ½ or older to make tax-free gifts in any amount up to a total of $100,000 per year from a traditional or Roth IRA directly to qualified charities (“qualified charitable distributions”). Distributions from 401(k), 403(b) or other types of retirement accounts are not eligible.

The IRA owner is not entitled to a charitable income tax deduction for the qualified charitable distributions, but such distributions are not included in the IRA owner’s income.

IRA distributions that are not made directly to the charity don’t qualify.

Your church and our KBC and SBC agencies and institutions are “qualified charitable organizations”. Private foundations and donor advised funds are not.

While qualified charitable IRA distributions are not included in the giver’s income for income tax purposes, they are treated as part of the giver’s required minimum distributions. Therefore, those 70 ½ and older who must take required minimum distributions from an IRA and plan to make contributions to charity should strongly consider taking advantage of the ability to use their IRA as the funding source for making those charitable gifts.

Laurie Valentine is COO and Trust Counsel for the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; (502) 489-3533 or 1-866-489-3533 (Toll-free, Kentucky Only); KYBaptistFoundation.org

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.





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