Wednesday, August 9, 2017

Your Annual Gift – Forever

By: Richard Carnes

On any given Sunday, Baptist church members across the commonwealth of Kentucky give their regular tithes and offerings to their church and make contributions to Baptist ministry and mission causes that further the growth of God’s Kingdom across the world. Each of these great stewards is to be thanked for this act of faithfulness. Perhaps you have considered how to ensure that your support for these ministries continues indefinitely into the future; one way is to endow your gift.

To create an endowment, you would leave a certain sum of money or asset through your will or living trust, or perhaps name the charity as a beneficiary of a retirement plan or life insurance policy. That sum would be used to establish a fund benefitting the ministry cause as you have directed. The income distributed from the fund would be a continuation of your annual gifts.

How does this work? An organization like the Kentucky Baptist Foundation considers economic conditions when deciding on an appropriate distribution percentage. The total amount of the gift and this distribution percentage determine how much money will be distributed to your chosen cause on an annual basis. If for instance the distribution rate is set at 4 percent, then for each $1,000 annual gift you want to sustain, an endowment of $25,000 would be required. If you have been contributing $2,000 per year, an endowment of $50,000 would ensure an annual distribution of $2,000.

Ideally, the distribution percentage should be set so that the annual amount available for charitable purposes keeps pace with inflation. The goal is that over time the total return of the endowment will exceed the percentage distributed each year, which means that the endowment principal will grow – and annual distributions will increase accordingly. So, in a sense you will be an annual giver indefinitely, and thus ensure the ministry organization you value will continue to be supported.

To make intentional plans to care for your family and the ministries God is inspiring you to support, call upon the Kentucky Baptist Foundation as a helpful partner. If you have questions, please contact the Kentucky Baptist Foundation 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.

Tuesday, July 25, 2017

Coordinated Estate Distribution

By: Laurie Valentine

To assure what you own at death will pass as efficiently and effectively as possible you must have (and maintain) a “coordinated” estate distribution plan.

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 or revocable living trust. Likewise, jointly-owned assets will pass to the surviving joint owner at your death, no matter what your will or trust says.

Only assets in your name alone or designated to be paid to your estate, your executor or the trustee of your trust will pass as your will or trust directs.

Failure to coordinate how assets will pass may result in a beneficiary receiving assets in a way you did not intend. For example: Your intention is for anything coming to your son from you at your death is to be held in trust for him until he reaches age 25. Your plan includes both a bequest to the trust for his benefit created 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.

Make sure your plan is coordinated, and stays coordinated, by regularly reviewing how your assets are titled and how beneficiaries of life insurance, retirement accounts and possibly other assets are designated. Then compare asset titling and beneficiary designations with the terms of your will or trust.

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.



Wednesday, July 12, 2017

Life Insurance: Ways to Give

By: Richard Carnes

People purchase life insurance for the following reasons:

· Income Replacement - which is especially important for younger couples with children who want to provide income for survivors in the event of premature death.

· Mortgage protection - to pay any mortgage balance due at death.

· Final Expenses - following a death when other sources of cash may not be available.

· Liquidity - particularly important in the case of a large estate with assets like a private business when money is needed for taxes and other expenses.

You Can Give Unneeded Life Insurance

With the passage of time, these needs for life insurance may no longer exist. The children have grown and left home, the mortgage has been paid, significant investments have accumulated, and either a business has been sold or a transition plan developed. In these cases, the insurance policy can make an excellent charitable gift.

If you are one of those with an insurance policy no longer needed for its original purpose, consider transferring ownership of it to a Baptist ministry or to the Foundation to create an endowment fund that will support the Baptist ministries of your choice. If the policy is paid up, you would receive a charitable deduction for the lesser of the replacement value and your cost basis (a value that can be provided by the insurance company). If you are still paying premiums, you would receive a charitable deduction for approximately the cash value of the policy and you would also receive deductions for premiums you subsequently pay.

You Can Name a Charitable Beneficiary

If you prefer to retain ownership in case your circumstances should change and you or your family might need the cash value or proceeds from the policy, you could name the charity as beneficiary but not policy owner. Although you would not receive a current income-tax deduction, your estate would be entitled to an estate-tax deduction for any proceeds paid to the charity.

A life insurance policy can be a great way to ensure a future gift to Baptist ministries. 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, June 28, 2017

Lifetime IRA Giving

By: Laurie Valentine

While many IRA owners depend on distributions from their IRA to provide needed cash flow for their living expenses during retirement, some do not. And, for those who have other retirement income sources, having to take a “required minimum distribution” out of their IRA every year, once they turn 70 ½, results in unneeded income on which they must pay taxes.

The Charitable IRA Rollover tax law permits a person who is 70 ½ or older to make charitable gifts in any amount up to a total of $100,000 per year from a traditional or Roth IRA directly to qualified charities. Your church and our KBC and SBC agencies and institutions are “qualified charities”.

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 IRA charitable distributions, but those distributions are not included in the IRA owner’s income. They are, however, recognized as required minimum distributions that will reduce (or eliminate) the amount the IRA owner must pay themselves out of their IRA that year.

Charitable IRA Rollover distributions, for those that qualify, can be used as the source of your monthly tithes and offerings giving as well as for capital campaign and other “over and above” giving to your church and other charitable causes.

Use your required, but unneeded, IRA distributions for Kingdom advancement in a tax-wise manner by directing them to your church or other Christian cause.

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, June 15, 2017

KBF Ambassadors

By: Richard Carnes

On March 8, 2017, the Kentucky Baptist Foundation (KBF) celebrated its 72nd anniversary of service to Kentucky Baptist individuals and ministries. Despite our strong history, we continually encounter Baptists who are unaware of our estate stewardship ministry. I am convinced the Foundation’s greatest challenges have been, and continue to be, our visibility, awareness, and understanding among Kentucky Baptists.

From the beginning of the Foundation’s ministry, its’ Core Convictions have been:

1. God is creator and owner of all things and we are called to be His stewards (managers).

2. How we plan our estates will likely be the single most significant act of financial stewardship we will ever make.

3. Through estate stewardship, each of us can impact the world for Christ.

4. To be successful in reaching their communities and the world for Christ, churches must be equipped to cultivate and secure legacy gifts their members are inspired to give.

One way we plan to increase our visibility is with a new initiative --- the KBF Ambassador Program. The Ambassador Program’s purpose is to create a network of ministerial and lay leaders who will enhance the visibility and awareness of the Foundation’s ministry and services by serving as the Foundation’s cheerleaders and encouragers in their congregations and communities.

Ambassadors in the KBF program will have the opportunity to become knowledgeable of the Foundation’s ministry and services and recommend the Foundation’s services to individuals or churches who have needs that the KBF may be able to meet. Foundation staff and board member representatives will provide education sessions on the Foundation’s ministries at regional sessions in the coming months.

We strongly believe this volunteer ministry will produce significant resources to assist local Baptist churches in reaching our communities and our world for Christ. Please prayerfully consider becoming a member of this new group of Kentucky Baptist men and women. Your efforts through KBF Ambassadors may help encourage and educate your friends in effective ways to provide for their families and Kingdom work.

To learn more about the KBF’s Ambassador Program, 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.

Thursday, June 1, 2017

Legacy Gift Designation

By: Richard Carnes

You may be hesitating to make a legacy gift to your church because you don’t want to incur the expense of changing your will. Actually, there are numerous ways to arrange a future gift while leaving your current will intact.

1. You can name your church or other Baptist ministry as a beneficiary of any portion of the death proceeds from a life insurance policy.

2. You can instruct your bank to distribute any portion of what remains in your account to your church or ministry at the end of your life. This is called a payable-on-death (POD) account.

3. You can instruct your investment advisor firm to transfer to your church or ministry any portion of investments held at the end of your life. This is called a transfer-on-death (TOD) account.

4. You can name your church or ministry as a beneficiary of any percentage of the remaining funds in your IRA, 401(k), 403(b), or other defined contribution retirement plan.

In each case, you need only request and complete the beneficiary form provided by the financial institution. When a church or ministry is named as beneficiary through one of these arrangements, the proceeds are not governed by your will and are not subject to probate.

However, like the provisions in a will, these beneficiary designations can be changed at any time. You need only complete a new beneficiary form. Adding or removing a charitable bequest requires a will change, though you could do this with a simple codicil (amendment) if the rest of the will still expresses your wishes.

A charitable gift by beneficiary designation, like a bequest in a will, qualifies for an estate-tax charitable deduction and could result in estate-tax savings, depending on the size of your estate.

Increasingly, estate assets are transferred to beneficiaries outside of a will. The Kentucky Baptist Foundation is honored to work with individuals seeking how best to designate estate assets they wish to gift to their church or other Baptist ministry 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 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, May 17, 2017

Perpetuate Your Tithe

By: Laurie Valentine

Tithing is part of our Christian stewardship responsibilities. It is a discipline practiced by many all of their lives and it is vital to the continued viability of the programs and ministries of our churches.

When you die, will there be someone to “step into your shoes” to provide the funds your tithe has been providing to your church?

To assure your church will have the financial resources it needs, until the Lord returns, consider including in your estate plan a provision for the creation, at your death, of an endowment fund for the benefit of your church. Or, establish an endowment fund now to which you can make modest gifts at regular intervals during your life with provision in your estate plan for a final gift to the endowment at your death.

To create an endowment fund large enough to have sufficient earnings to fund your tithe in perpetuity requires a gift at your death (or a combination of gifts during life and at your death) equal to approximately 25 times your current annual tithe. This assumes an annual distribution rate of 4.0%.

For example, if the current amount you tithe each year is $2,000, the endowment would need to have $50,000 in it ($2,000 x 25) by the time you die. Assuming the endowment is invested to grow its value over time, the amount it will distribute to your church will also grow over time.

Assure your tithe will provide support until the Lord returns by endowing it.

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.