Friday, December 2, 2016

Preparing for the Future

By: Richard Carnes

Scripture and life experiences teach that there are important differences between capital and income. Income is earned on a regular basis and is spent meeting daily needs. Unspent income typically becomes part of our capital and is invested in savings accounts, houses, retirement accounts, businesses and more. We work hard to accumulate sufficient capital over our working years to enable us to live off the income the capital produces when we cease working to earn a regular salary.

Another word for capital might be “endowment”. An endowment is simply a collection of assets that are invested to produce income that can be used for personal or charitable purposes. We most commonly think of endowment as financial assets and investments, but the Old Testament contains significant examples of God using capital to advance His Kingdom. In reading Genesis 41 we learn of a time early in Israel’s history when God used Joseph to advise the king of Egypt to store grain in anticipation of a looming seven years of famine. God inspired Joseph, and this grain storage became an endowment that kept the people from starvation. From this saved population descended the Savior of the world.

As we evaluate what God has entrusted to us in the way of capital assets within our estates, we must acknowledge the three possible destinations for our assets. We can transfer assets to loved ones, to Christian ministries that have significantly impacted our lives, or we can endow the U.S. Government through taxes paid to the Internal Revenue Service. Fortunately, many faithful Baptists are looking at the ministries of their churches and prayerfully considering what God is inspiring them to do. Individuals can help sustain Christian ministries during a time when their local church may experience a “famine” of financial support for regular ministry efforts.

To make intentional plans to care for your families and the ministries God is inspiring you to support, the Kentucky Baptist Foundation is a resource to call upon. If you have questions or desire a private estate stewardship consultation, please 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, P O 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.



Friday, November 4, 2016

Gifts That Pay You Income

By: Laurie Valentine

Would you like to provide future support to your church or another favorite Baptist cause while receiving guaranteed income for the rest of your life, management of assets and tax savings? If your answer is yes, a charitable gift annuity may be just what you are looking for.

A charitable gift annuity is a contract between you and the Kentucky Baptist Foundation under which you agree to make a gift of cash or appreciated stocks, bonds or mutual fund shares and, in exchange for your gift, the Kentucky Baptist Foundation agrees to pay you (or you and one other person) a fixed amount each year (“annuity”) for the rest of your life.

The annuity payment amount depends upon the value of what you give and your age at the time you make the gift. The older you are the higher the payment rate. The annuity payment amount is not dependent on what your gift earns.

At your death, whatever is left of your gift is distributed to the charitable cause or causes you have named to be used as you direct.

Tax savings may be available from the charitable income tax deduction that is allowable and also from the fact that part of each payment you receive is tax-free. Those tax benefits can make the cost of making a charitable gift annuity gift very reasonable.

Using appreciated stocks, bonds or mutual fund shares to establish a charitable gift annuity can also provide capital gains tax savings.

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, November 3, 2016

Year End Giving



By: Richard Carnes

Making charitable gifts is not only an opportunity for you to make a difference in your community through a favorite charitable ministry; it’s also an excellent way to reduce your tax burden for the year. 

A tax deduction for charitable giving isn’t guaranteed just because you’re generous. As with everything in tax law, it’s important to follow the rules. By doing so, you can help ensure that your donations result in maximum benefits for you and the chosen charitable organizations you support through your gifts.

The Internal Revenue Service offers the following reminders to help taxpayers plan their gifts to charity:

· Qualified charities. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition, churches are eligible to receive deductible donations. That is true even if they are not listed in the tool’s database.

· Year-end gifts. Contributions are deductible in the year made. Donations by check count for 2016 as long as they are mailed in 2016. Also, donations charged to a credit card before the end of 2016 count for 2016, even if the credit card bill isn’t paid until 2017.

· Itemize deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction.

· Record donations. The long-standing requirement of the IRS is that a taxpayer obtain an acknowledgement from a charity for each deductible donation (either cash or property) of $250 or more. Also, be aware that additional rules apply for a property contribution of $250 or more.

As you begin to look beyond 2016, you may also wish to consider arranging for future charitable gifts that result in immediate tax and other financial benefits. By doing so, you may be able to enjoy tax savings, increased income and other financial advantages today while providing for a significant charitable gift to a favorite Baptist ministry as part of your long-range planning.

If you have questions about these gift-planning strategies, please call 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, October 5, 2016

Double Tax Savings Giving

By: Laurie Valentine

With financial market ups and downs over the past few years there probably have been times when your stocks, bonds and/or mutual fund shares have been worth considerably more than what you paid for them and times when that has not been the case. And, that same pattern will continue in the future.

For those considering an above-and-beyond gift to their church, or one of our KBC or SBC ministries, using appreciated securities to fund that gift may be a better choice than giving cash. That’s because your gift of appreciated stocks, bonds or mutual fund shares can provide both income tax savings, if you itemized deductions on your income tax return, and capital gains tax savings.

The income tax deduction value of your gift is the current price you would get if you sold the security, not what you paid for it. And, by giving the appreciated security you avoid the capital gain (difference between current market value and what you paid for the security) you would have to report if you had sold it.

Appreciated stocks, bonds or mutual fund shares can be used for outright gifts or to fund a gift that pays you an income for life with remainder to the charitable cause or causes you designate at your death.

Tap in to the potential for double tax savings by prayerfully considering a gift of appreciated securities.

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, October 4, 2016

Social Capital

By: Richard Carnes

United States tax laws provide an incentive in the form of tax savings for making gifts to support non-profit organizations that provide vital services to our communities. The underlying philosophy behind this tax incentive is that private financial giving does many jobs that government entities otherwise might be called upon to do with tax money. “Social capital” is that portion of your wealth that will either pass involuntarily to the government as taxes or which can be directed voluntarily by you to charitable causes consistent with your spiritual values. If your social capital passes as taxes, you permit the government to choose what institutions and programs will be funded. Alternatively, charitable giving allows you to direct these funds to ministry causes and Christian organizations that will perpetuate your highest spiritual values.

Directing your social capital demonstrates good stewardship. First and foremost, the ministries and charitable causes that echo your values will be enhanced and sustained. Moreover, your Baptist church, the Kentucky Baptist Convention, and its agencies and institutions are making a gospel difference for the Kingdom of God in our state, nation and around the world. These ministry organizations are worthy recipients of a donor’s social capital to help sustain their ministries.

Individuals commonly express concern that giving social capital to church and ministry causes could affect the financial security their family. However, there are a variety of creative giving options that allow you to support and sustain Kingdom work while also assuring the future financial security of your family. Through prudent planning, the potential tax savings resulting from your charitable gifts may actually provide more financial resources for you and your family, and those savings may permit you to financially give more that you ever dreamed possible.

If you have questions about these gift planning strategies, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533 for a private estate stewardship consultation.

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.

Monday, September 12, 2016

Planning for Your Family

By: Laurie Valentine

Planning for how to provide for your family at your death should be a key objective of estate planning and it is good stewardship. The costs of probating and distributing your estate and the amount of death taxes due may be greater if you have not planned well, which means less to pass to your beneficiaries.

For those with children under age 18, thought needs to be given to whom you want appointed as guardian for your children if both parents died before all are 18 or older. The court-appointed guardian will make all the decisions you as a parent would be making for your children until each reaches age 18. You can include a provision in your Will designating who you want appointed as guardian.

A decision also needs to be made as to whether the share you want to leave to a family member will be given to them outright or whether their share should be managed by someone else, either until they get to an older age or perhaps for the rest of their life if they are incapacitated or just not good money managers.

Including a trust provision in your Will allows you to empower another person to manage the share of a family member beneficiary. Usually the trustee is permitted to use the trust income for the beneficiary and may also be authorized to use trust principal for the beneficiary’s health, education and other needs.

Heed Paul’s admonition in 1 Timothy 5:8 and “….provide for [your] relatives, and especially for the members of [your] household…” 

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, September 6, 2016

Educate and Encourage

By: Richard Carnes 

As the development agency for Kentucky Baptist churches, the Kentucky Baptist Foundation (KBF) helps educate a church’s staff and lay leadership on effective ways to implement intentional legacy planning programs for church members. It is imperative that churches educate and encourage their members to see their financial stewardship more broadly than just the donation they place into the offering plate. This stewardship training extends to planning the utilization of all the financial resources entrusted to church members for the benefit of their family, their church, and Kingdom causes.

Church leaders can make great strides in impacting the financial well-being of church member’s families and the well-being of the church’s ministries by scheduling teaching opportunities for their church members on how to become “Kingdom -minded” stewards. The great news for church leaders is they are not alone in providing this type of Christian estate stewardship training for their members. The KBF helps facilitate this training of church members to become more “Kingdom-minded” by conducting educational seminars on financial and estate planning topics at your church. This educational resource is provided by the KBF at no cost to Kentucky Baptist churches.

Some examples of frequently requested seminars are:

Estate Planning Mistakes and Solutions - Discover what the ten biggest estate planning mistakes are and how to avoid them to assure you manage your finances wisely.

Who Will Be In Charge If …? – Explores incapacity planning tools – powers of attorney, health care advanced directives, Living Trusts and what happens if no prior planning has been done.

Ways To Make Gifts To Your Church – Estate stewardship giving ideas to encourage church members to take stewardship to a deeper level – what to give, how to give, and why we as Christians should give.

As your church begins to plan its Fall series of education and training for Wednesday evenings, Sunday evenings or the Sunday morning Sunday School hour, please consider inviting KBF staff to conduct a seminar session at your church. To learn more, please contact the KBF’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533 for the KBF’s full list of legacy planning seminar topics and to schedule a seminar date.

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