Retirement Account Gifts

By: Laurie Valentine-COO & Trust Counsel 

For many, one of the largest assets they may own is their IRA or other retirement account. And, unlike almost any other assets you own, there is potential for a double tax “hit” on the transfer of retirement account assets at your death.

The value of your retirement accounts are part of what is counted in determining if your estate owes any federal estate tax (first tax “hit”) and, if your family is named as the beneficiary/new owner of the retirement account, when family member beneficiaries take funds out of the retirement account after your death they will have to pay income taxes on what they take out (second tax “hit”) just like you did.

To avoid, or reduce, the double tax hit, consider using all or a portion of a retirement account to fund the gifts you want to make at your death to your church and other charitable causes important to you. The portion of the retirement account passing to charitable organizations provides your estate an estate tax charitable deduction and, since your church and other charitable beneficiaries are tax exempt, they do not have to pay income taxes on what they receive from your retirement account.

IRAs and retirements accounts….a great resource to use for giving you want to do at your death.

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.

Giving Appreciation

By: Richard Carnes 

Many individuals are reviewing their charitable contributions at the year end and considering how they could provide additional gifts to their church and ministry causes. Perhaps you would like to make gifts above what you give out of income as tithes and offerings to provide on-going support to additional Baptist causes.

One such way to achieve this giving is to use assets that have appreciated in value for making “above and beyond” gifts to support the Christian ministries that are important to you. If you have investment securities you have owned for more than a year that are worth more than the security cost, consider using this asset to make gifts.

Your deduction will actually be based on the full value of the security. In addition, you will not owe capital gains tax that would normally be due on a sale of the security.

Using an appreciated asset to make a gift to your church or other Baptist cause can result in a lower after-tax cost to make your gift than if you use the same amount of cash to make the donation. Savings from the charitable deduction and the bypass of capital gains can be considerable. How much you save depends on your actual income and capital gains tax rates.

If you own investment securities that are now worth less than they cost, consider selling the security and give the cash proceeds. When you are able to deduct the amount of the loss as well as the gift amount, your deductions may well total more than the current value of the investment.

The process of making gifts of appreciated securities need not be complicated. If your financial advisor holds the securities for your account, instruct that the security be electronically transferred to the financial account of the designated charity. This is often the most convenient way of making your gift.

When giving securities, including mutual funds, bonds, notes or mortgages, specific advice and instructions should be obtained from your financial advisor. Additional time should be allowed for completion of such gift transactions.

The Kentucky Baptist Foundation staff is honored to work with individuals seeking how best to make gifts of appreciated assets to 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.

12 Creative Giving Ideas for 2015- #12

By: Laurie Valentine- COO & Trust Counsel

A Donor Advised Fund (“DAF”) is a legacy giving plan that provides the giver immediate tax benefits and the input on future distributions.

A DAF is established through gifts to a public charity under an agreement in which the giver retains for himself/herself, and possibly others, the right to make recommendations for future distributions out of their DAF to other charitable organizations. Those recommendations can be for distributions of the DAF’s income and/or principal.

Gifts to a DAF are deductible in the year they are made, whether or not there is any charitable distribution out of the DAF during that year.

A DAF is a good charitable giving plan for people who want flexibility in timing their charitable support. A gift can be made to your DAF at a time when it may be most advantageous for tax-planning purposes without having to immediately decide what charitable causes/projects the gift will ultimate support.

A DAF can also be an excellent tool for teaching philanthropy to children. Including children as “advisors” of the family’s DAF gives them the opportunity to learn first-hand, as the family makes decisions about charitable distribution recommendations together, how their parents approach philanthropy, which organizations they value most and why, and what their parents expect from charitable organizations they support.

Donor advised funds provide flexibility in timing your philanthropic support to charitable causes important to you and a method for “growing” giving children.

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.

Spiritual Shade Trees

By: Richard Carnes

What are your favorite memories of shade trees? I vividly recall the shade tree planted by my grandparents at their home in Rock Springs, Alabama. My memories include making countless freezers of homemade ice cream under this shade tree; family reunion meals spread out beneath the canopy of this tree and lessons taught by two godly grandparents to 15 grandchildren. Looking back, while we grandchildren didn’t plant this tree, we enjoyed all the benefits it provided.

My grandparents’ life example and legacy were built on both spiritual investment and financial investment. As a farmer and an educator, they lived a modest life, but one committed to supporting their church with gifts of time, talent and property. They realized and instilled in their children and grandchildren that they were working to touch lives across the world from their pew in Rock Springs Baptist Church. You might say that my grandparents were planting spiritual shade trees under which they would never sit, but rather for others to enjoy the lasting spiritual blessing they would provide.

You may be asking, what do shade trees and the Kentucky Baptist Foundation have to do with each other? The ministry of the Foundation is focused on encouraging and facilitating legacy actions on the part of Kentucky Baptist church members. Our team fulfills this mission through educating individuals on how to make gifts through their estate plans. These gift decisions will have the effect of planting spiritual shade trees under which the donor may never sit, but under which many others will sit and enjoy the benefit for generations to come.

That is what legacy planning and giving is all about: committing all the talents and resources God has entrusted to you for the benefit of your family, your church family, and all persons that need the hope of Jesus Christ.

Many donors have entrusted the planting of their spiritual shade trees through the Kentucky Baptist Foundation during the past 70 years. The Foundation is pleased that this past year, through the earnings produced on the gifts and investments placed with the Foundation, it was able to distribute $6,102,144 supporting the ministries of Kentucky Baptists across the state and the world.

Let me encourage you to call on the Foundation to assist you in learning how you can plant your own spiritual shade trees. To learn more, 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, 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.

12 Creative Giving Ideas for 2015- #11

By: Laurie Valentine- COO & Trust Counsel

The current low interest rate environment has increased interest in legacy giving plans that use a factor tied to current interest rates to value the gift to charity. When interest rates are low, the value of the charitable portion of those giving plans is higher. One such plan is a gift of a remainder interest in real estate.

To give a remainder interest in real estate to charity, you simply deed property to a charity while retaining for yourself the right to full use and enjoyment of the property for a term of years or the rest of your life. At the end of your retained interest, the property is immediately owned by the charity.

The charitable gift is completed when you sign the deed giving the remainder interest to charity, not when your interest in the property ceases. That means you can take action now, but continue to have use of the property for whatever period works for your situation.

Real estate remainder interest gifts…a legacy gift plan that provides potential income tax savings to the giver now and a significant gift to charity in the future.

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.

Are You an Oikonomos?

By: Richard Carnes 

Christian Stewardship is a discipline that must be learned and lived. In the New Testament we see the Greek word oikonomia (stewardship) referenced. Oikonomia means the act of managing what belongs to another person. A person is not born with this knowledge of stewardship, it has to be learned from other wise, mature Christians. Also it is important to recognize that the exercise of oikonomia is more about one’s spiritual development than one’s financial development.

As we search further the variations of the word stewardship we come to the Greek word oikonomos (steward). An oikonomos is a person in charge of the affairs of another; one who acts as a manager; one who is entrusted with the management of the material things owned by someone else.

When we explore the role of the steward in the New Testament period we learn that the steward functioned like a member of the family. The steward was expected to exercise intelligence and initiative, unlike a slave or servant. We also come to understand that stewardship involved both relationship and responsibilities for the master as well as accountability and faithfulness to the master.

Churches can have a tremendous influence on its members in creating a stewardship culture that cultivates Kingdom-minded stewards. Church leadership can foster this stewardship culture through regularly presenting biblical truths about the stewardship of our lives, including the possessions God has entrusted to us, along with His expectations, promises, rewards and punishments.

The Kentucky Baptist Foundation can assist Kentucky Baptist churches in fostering a stewardship culture among its members by encouraging individuals to have an up-to-date Christian estate plan; educating church members on how to achieve their Christian estate planning objectives; and providing private, confidential estate stewardship consultation to individuals seeking guidance on how to support the ministries of their church through their estate plan.

The Kentucky Baptist Foundation staff is honored to work with individuals seeking how best to be a faithful oikonomos. To learn more about how we can assist you or your church, 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.

Give an Income Stream

By: Laurie Valentine

Is your church in a capital campaign? Do you make recurring gifts each year to missions organizations, childcare ministries, your Baptist college alma mater or other charitable causes?

Would you be interested in making those gifts in a way that coordinates that giving over the next few years with a tax-saving way to transfer assets to your family?

If so, consider a charitable lead annuity trust (“CLAT”).

A CLAT is a legacy giving plan that pays a fixed income stream to one or more charitable causes for a designated period of years. At the end of the term of years the remainder of the CLAT can either be returned to you (“Grantor CLAT”) or be distributed to your children and/or other family members (“Non-Grantor CLAT”).

While creating a Non-Grantor CLAT does not entitle you to a charitable income tax deduction, it does provide a way to pass assets to your children or others at reduced gift and estate tax cost.

Gift tax savings come from the fact the tax value of the future gift to your family is the present value of the remainder interest in the trust, not the full value of what you place in the trust. With careful coordination of the fixed amount being paid to the charitable beneficiaries and the trust term you can reduce the present value of the remainder gift to family significantly.

Estate tax savings result from the removal of the asset, any subsequent appreciation and the future income it generates from your estate.

Leverage future asset transfers to family while providing recurring current gifts to charitable causes important to you by “giving an income stream” through a CLAT.

Laurie Valentine if Chief Operating Officer and Trust Counsel for the Kentucky Baptist Foundation. For more information, please call (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.

Fiduciary Management of Church Assets

By: Richard Carnes

The Kentucky Baptist Foundation continues to discover that a large number of churches are unaware of the fiduciary services and investment management oversight services that the Foundation makes available to Kentucky Baptist churches and institutions. Of course, we are grateful and pleased to already be assisting the investment needs of many churches using the Foundation’s investment oversight services and we desire to extend this capability to many more churches.

You may have heard the term fiduciary and wondered what it means. A fiduciary is a person or organization who has the legal responsibility for managing someone else’s money, including members of a church’s investment committee, foundations, endowments, and trustees of private trusts.

Fiduciary status is generally defined as a person who:

· Manages property for the benefit of another;

· Exercises discretionary authority or control over assets;

· Acts in a professional capacity of trust and renders comprehensive and continuous investment oversight

A fiduciary demonstrates prudence by the process through which investment decisions are managed, rather than by showing that investment products and techniques are chosen because they were labeled as “prudent.”

The Kentucky Baptist Foundation is honored to serve Kentucky Baptist churches and Kentucky Baptist institutions through its fiduciary service of investment management oversight. We are happy to provide information about the Foundation’s investment service to those churches who may have this need. We encourage church leaders to invite Foundation staff to make an investment presentation to the appropriate leadership group in the church for consideration and comparison.

The hallmarks of the Kentucky Baptist Foundation’s investment management oversight service are: value added performance; Christian-based social screening of investment securities; and below market fee cost. Although past performance is no guarantee of future results, the Kentucky Baptist Foundation can provide your church with references of other churches that have been satisfactorily using the Foundation’s services for a number of years.

To get started with learning more about this valuable fiduciary service of the Kentucky Baptist Foundation, 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, 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.

Giving Now and Later

By: Richard Carnes

Some individuals strongly desire to establish plans to make a legacy gift now, but they are hesitant about giving up the annual income stream from the asset they are considering gifting to a Baptist ministry cause. One effective way to both make a gift and retain a fixed payment for life is through establishing a charitable gift annuity.

A gift annuity enables the donor to make a contribution that might otherwise come through their estate, while also retaining significant benefits today. When a donor establishes a gift annuity through an organization like the Kentucky Baptist Foundation, the property that funds the gift annuity is eventually used for the charitable ministry purpose that the donor designates, just as if the donor had left a bequest by will. But unlike a bequest, a gift annuity will provide the donor with regular payments and other benefits for as long as they live.

Under the terms of a gift annuity the donor can make a charitable gift with cash or other property. The donor or others they designate then receive fixed payments for life. The amount and frequency of the payments are determined at the time the gift annuity is funded. Also, the payments will never change and are designed to continue regardless of how long you live.

Because a portion of the gift annuity will be used for charitable purposes, the donor is entitled to an income tax deduction for the year of gift. Additionally, for a period of time, part of each payment may be received free of income tax, or be taxed at capital gains tax rates that may be significantly lower than rates paid on other income.

To summarize, the benefits for the donor considering this type of legacy gift plan are as follows:

· The satisfaction of making an important contribution to a Baptist ministry in which you believe.

· Fixed payments for life.

· An immediate income tax deduction

· A partial bypass of capital gains tax

· An extended payment of any capital gains tax due

· Partially tax-free payments for a number of years

· Removal of assets from the donor’s taxable estate while continuing to enjoy lifetime payments

To seek assistance in creating a charitable gift annuity that will ultimately provide support for worthy Baptist causes, 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, 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.

12 Creative Giving Ideas for 2015- #10

By Laurie Valentine- COO & Trust Counsel
A charitable lead annuity trust (“CLAT”) is a legacy giving plan that provides a fixed income stream to one or more charitable causes for a designated period of years. At the end of the trust term the trust remainder can either be returned to you (this is a “grantor lead trust”) or be distributed to your children and/or other family members (a “non-grantor lead trust”).

While a gift to a “non-grantor” CLAT does not entitle you to a charitable income tax deduction, it does provide a way to pass assets to your children or others at reduced gift and estate tax cost. Gift tax savings come from the fact the tax value of the future gift to your family is the present value of the remainder interest in the trust, not the full value of what you place in the trust. With careful coordination of the fixed amount being paid to the charitable beneficiaries and the trust term you can reduce the present value of the remainder gift to family significantly. Estate tax savings result from the removal of the asset, any subsequent appreciation and the future income it generates from your estate.

If you church is in a capital campaign or you want to fund your annual giving for missions, childcare ministries or other charitable causes for the next few years in a way that coordinates your charitable giving with a tax-saving way to transfer assets to your family, a CLA may be the legacy giving plan to consider.

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.

A Financial Tidal Wave

By: Richard Carnes

The United States is presently in the midst of the largest generational transfer of wealth in history. Most estimates project the amount of this wealth transfer to be upwards of 41 trillion dollars between the years 1998 through 2053. Churches have not capitalized on the opportunity presented by this generational wealth transfer. Also, many churches have not educated their membership about their responsibility to wisely prepare for executing this upcoming wealth transfer in a God honoring way.

In most churches, the stewardship focus has been on tithes and offering giving that comes from members’ income and “liquid assets”, which may represent only a small portion of a member’s net worth. Certainly it is good for the church to instill this discipline of current giving, but the discipline of financial stewardship should also include an attitude of legacy giving.

What is a legacy gift?

· It is a gift over and above tithes and offerings. It is a gift out of assets not out of income.

· It is a gift that can’t be put in the offering plate.

· It is a gift made in light of the giver’s overall estate and financial plans.

· It is a gift that uses tax-advantaged methods to accomplish the giver’s objectives.

· It is a gift that may require professional adviser assistance to complete the contribution.

Developing a coordinated legacy giving effort is how the church can capitalize on the tidal wave of opportunity presented by this generational wealth transfer. The legacy gifts that transpire from the churches’ stewardship education efforts will most certainly provide additional “above and beyond” financial resources that will permit the church to enhance and expand its programs and ministries. Such an effort will also encourage church members to “Honor the Lord with [their] substance” (Proverbs 3:9).

As church leadership prays about its obligation to educate church members about the stewardship of legacy giving, the leadership should determine how legacy gifts will be used to further the church’s mission and what Kingdom impact will result from receiving legacy gifts.

How does a church get started in developing its personalized legacy giving ministry? An excellent first step is to contact the Kentucky Baptist Foundation. We welcome the opportunity to explain our legacy gift program development assistance. You may contact us 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.

Securing Your Church’s Financial Future

By: Richard Carnes

In past columns we have discussed how churches are the most overlooked charities in estate stewardship and legacy giving. It is not that church members are opposed to supporting the ministries and mission efforts of their local church in this fashion. Rather, it is primarily due to the fact that most church members are never encouraged by their church leadership to consider giving a part of their estate to their church.

It is imperative that churches provide education and encouragement to its members in seeing their available financial resources much more broadly than just the cash that is placed into the offering plate. These resources can also be a person’s non-cash assets (which on average represent 91% of a person’s net worth).

Church leaders can make great strides in impacting the church’s financial future by seizing the opportunity to teach their church members to become “Kingdom-minded” stewards through the following ways:

· Teach members what the Bible reveals about an authentic stewardship lifestyle.

· Help members realize that how they plan their estate likely will be the most significant act of financial stewardship they will ever make.

· Encourage members to have and up-to-date Christian estate plan.

· Educate members on how to accomplish their charitable giving objectives through their estate planning.

The great news for church leaders is that they are not alone in preparing this type of Christian estate stewardship education and training for its members. The Kentucky Baptist Foundation stands ready to help facilitate this training of church members to become “Kingdom-minded” stewards. An active part of the Foundation’s service is the conducting of no cost seminars and teaching series on financial and estate planning at churches and associations. Also the Foundation staff is available to individuals for free, private estate stewardship consultation as they consider their estate planning, incapacity planning, and charitable gift planning.

To get started with this action step of securing your church’s financial future, 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; www.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.

Flexible Family Philanthropy

By: Laurie Valentine-COO & Trust Counsel 

A Donor Advised Fund (“DAF”) is a giving plan that provides the giver immediate tax benefits and the input on future distributions.

A DAF is established through gifts to a public charity under an agreement in which the giver retains for himself/herself, and possibly others, the right to make recommendations for future distributions out of their DAF to other charitable organizations. Those recommendations can be for distributions of the DAF’s income and/or principal.

Gifts to a DAF are deductible in the year you make them, whether or not there is any charitable distribution out of the DAF during that year.

A DAF is a good charitable giving plan for people who want flexibility in timing their charitable support. A gift can be made to your DAF at a time when it may be most advantageous for tax-planning purposes without having to immediately decide what charitable causes/projects the gift will ultimate support.

A DAF can also be an excellent tool for teaching philanthropy to children. Including children as “advisors” of the family’s DAF gives them the opportunity to learn first-hand, as the family makes decisions about charitable distribution recommendations together, how their parents approach philanthropy, which organizations they value most and why, and what their parents expect from charitable organizations they support.

Donor advised funds provide flexibility in timing your philanthropic support to charitable causes important to you and a method for “growing” giving children.

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.

A Super Saturday

By: Richard Carnes 

Recently, I had the privilege to participate in the first of four Super Saturday training conferences for all the local church ministry segments, including: discipleship, preschool & children, Sunday small groups, Woman’s Missionary Union, worship and music, youth ministry, and the list goes on. This tremendous conference is coordinated by the Kentucky Baptist Convention Mission Board staff.

I enjoyed the great opportunity to meet with the church treasurers that attended the session on Conducting the Financial Business of the Church. This session was facilitated by Don Spencer, the KBC’s Director of the Church Financial Benefits department and Tom Adkisson, the principal partner of a local CPA firm. The informative session provided valuable subject matter for the local church treasurers on the topics of Charitable Contributions, Handling Money in the Church, Basics of Financial Support for Ministers, and Federal Reporting Issues.

It was also my pleasure, as a part of the session, to speak with the treasurers on how the Kentucky Baptist Foundation can assist local churches to bridge the gap to secure the financial future of their ministries. Many people are surprised to learn that churches are the most overlooked charities in estate stewardship and legacy giving support. Actually, this reality should not be a surprise when we recognize the average person’s net worth consists of 9% in cash and 91% in non-cash assets (home equity, life insurance, retirement assets, business assets, and savings.) Most churches’ appeals and education on financial support focus on the 9% cash of the person’s net worth and ignore the remaining 91% of the person’s assets.

The Kentucky Baptist Foundation helps bridge this gap for churches by educating church members on the value of having an up-to-date Christian estate plan to address the 91% of a person’s assets. We provide this educational support to church members through a variety of estate stewardship seminars on how to accomplish their Christian estate planning objectives.

The Kentucky Baptist Foundation staff is also available to assist you by providing private estate stewardship consultation. 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, 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.

12 Creative Giving Ideas for 2015- #9

By Laurie Valentine- COO & Trust Counsel

Legacy giving not only offers a variety of ways to provide valuable support to charitable causes important to you, it can also help you solve personal financial challenges.

One such giving plan is a charitable remainder annuity trust (“CRAT”). A CRAT is an irrevocable trust that pays a fixed, never-changing income stream to the giver and/or others for life or a term of years and the remainder to one or more charities.

Your lifetime gift of cash, securities or real estate to a CRAT entitles you to a current charitable income tax deduction equal to the present value of the charity’s remainder interest. And, a CRAT can provide beneficial ways to solve a variety of financial challenges.

Help a grandchild with college expenses by creating a “term of years” CRAT. A gift of $50,000 to a 10% five-year CRAT will provide a grandchild $5,000 per year for 5 years (a total of $25,000) and the value of the charitable gift for income tax purposes is $25,900. If the trust assets earn an average annual total return of 7.0% over the five year trust term there will be almost $42,000 left to distribute to the charitable causes you name in the trust agreement.

A CRAT may be the right legacy giving plan to provide support to a family member. A gift of $50,000 to a two-life 5.0% CRAT allows you to set up a plan that would pay your family member $2,500 per year for the rest of their life and then that same amount would be paid to you for the rest of your life, if you survive the family member. The value of your deductible charitable gift depends on the age of the family member and you at the time you set up the gift.

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.

Back To School

By: Richard Carnes

Late summer is always an exciting time for our children and young adults beginning to report back to schools and colleges across the state. The freshness of a new backpack, the wonder of a full box of sharpened crayons, and spring in the step of new athletic shoes all make for the beginning of their next educational adventure. But, for many budding young scholars, the hope of achieving their academic dreams is deferred due to their lack of sufficient financial resources.

The Kentucky Baptist Foundation has been honored to work with numerous donors whose passion is helping students receive the necessary financial support to achieve their educational goals. One example of this collaboration is the scholarship funds that donors have created to help off-set the costs of students’ education. For the upcoming academic year, the Kentucky Baptist Foundation had the privilege of awarding 77 scholarships to college and seminary students totaling $79,930 from the 17 scholarship endowments administered by the Foundation.

You may have this same passion and would like to explore how you can implement a legacy gift plan to fund a scholarship endowment like the ones referenced above. Or you may have a Christian school, college or Baptist seminary that you would like to support through a legacy gift.

The Kentucky Baptist Foundation staff is available to assist you by providing guidance in creating these scholarship funds and charitable endowments to support worthy Christian education causes across the state and the nation. 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, 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.

Watching Your Legacy

By: Richard Carnes- President & CEO 

Recently, my wife Karen and I had the great joy of caring for our 21 month old granddaughter while our son and daughter-in-law traveled on a weekend trip. We played, we hugged, we read bible stories and we ran around the house together, giggling and laughing all the way. As I listened to each new word and observed each new skill that she was developing, it became abundantly clear that I was observing a major piece of my unfolding legacy.

As I watched her and as she held my hand, walking ever so tentatively at times, it dawned on me that I was blessed to help her take the first of what will be millions of steps toward her own legacy. My heart nearly explodes with joy and desire to help her develop her potential and most importantly, come to her own personal relationship with Jesus.

I might also call this experience a part of investing for eternity. This type of investment includes passing on values, perpetuating traditions and promoting ideals for future generations. Each of us has the opportunity to incorporate this type of investing into our families and similarly into our churches and church related ministries. There are likely ministries you want to nurture and financially provide for, such as: mission endeavors, Christian education programs, children’s care, support efforts at your church and many other ministries for the building of God’s Kingdom.

As you watch the unfolding of your legacy, consider including charitable gifts in your estate and financial plans. This type of investing for eternity will assure that your generosity continues beyond your lifetime.

The Kentucky Baptist Foundation staff is available to assist you by providing private estate stewardship consultation. 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, 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.

12 Creative Giving Ideas for 2015- #8

By: Laurie Valentine- COO & Trust Counsel

A charitable remainder unitrust (“CRUT”) is legacy giving plan that provides you and/or other family members a potentially growing distribution stream during the term of the trust, with the remainder set up to benefit one or more charities at the end of the trust term.

You set up a CRUT by creating an irrevocable trust and transferring cash, appreciated securities or real estate to it. The CRUT will pay you and/or others an amount each year equal to the payment rate designated in the trust agreement multiplied by the value of the trust assets, as revalued on January 1 each year. The minimum payment rate is 5%.

The trust term can be for the lives of the non-charitable “income” beneficiaries or a fixed term not to exceed 20 years.

The payment out to you and/or other non-charitable beneficiaries each year will vary---if the trust assets increase in value from one year to the next, the payment amount will increase; if the value goes down, the payment amount will decrease. The goal is to select a payment rate that will allow some growth in the value of the trust assets from year to year so that the payments grow, thereby creating a hedge against inflation over time in what you are receiving from the trust.

When the trust term ends, whatever remains in the trust is distributed to the charities you have named in the trust agreement.

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.

Life Insurance Legacy Gifts

By: Laurie Valentine- COO & Trust Counsel

Using life insurance to make a legacy gift to your church, the Cooperative Program or other charitable organization allows you to make a larger gift than you may have ever dreamed possible. That’s because the premiums you pay are generally significantly less than the life insurance death benefit that will pay out at your death.

There are two ways to make a legacy gift with life insurance. You can name the church or other charity the primary or contingent beneficiary of the policy or you can transfer ownership and all rights in the policy to the charity.

Naming one or more charities as the primary or contingent beneficiary of a life insurance policy is simple. Doing that provides no current tax benefits to you, but does set up a plan to fund a potentially significant gift to the named charitable beneficiaries of the policy at your death for which your estate would get an estate tax deduction.

Transferring ownership of a life insurance policy to a charity is a charitable contribution for income tax deduction purposes. If the policy is paid-up, the charity holds it until you die and collects the death benefit. If premiums are still due on the policy, cash gifts you make in future years to the charity to provide the funds for premium payments are additional charitable gifts. If you get to the point you can no longer provide funds for future premiums, or don’t want to do that from the outset, the charity can cash in the policy or adjust the death benefit to take it to “paid up” status.

Leverage your legacy giving through a life insurance gift.

If you have questions, don't hesitate to contact me at our toll-free number (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.

Do You Know?

By: Richard Carnes- President & CEO 

Do you know that the average person’s net worth consists of 9% in cash and 91% in non-cash assets (home equity, life insurance, retirement assets, investments and business interests)? Do you know that 60% of Americans die without a Will, and of those who do have one, 70% have not reviewed it within the past three to five years? Do you also know that Americans are currently in the midst of the largest ever generational transfer of wealth? Estimates project that $41 trillion will pass from one generation to the next during the period of 1998 through 2053.

In view of this data it is vital for each of us to be faithful in our “estate stewardship.” As Christian Stewards (Managers) we should hold certain convictions regarding the resources God has entrusted to us for our use and oversight:

1. God is the creator and owner of all things, and we are instructed to be God’s managers.

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

3. Through thoughtful estate stewardship, each of us can care for our families and impact the world for Christ.

Whether we are considering our estate plan for the first time or reviewing plans already in place, we benefit from identifying our objectives, approaching them realistically, and avoiding hazards through seeking knowledgeable counsel. Appropriate counsel helps us know where to begin, what to look for, and what we might expect in the process. Ultimately, we can turn this stewardship task into effective, God honoring plans that support and provide for our families and support the building of God’s Kingdom.

The Kentucky Baptist Foundation staff stands ready to assist you by providing private estate stewardship consultation. You may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (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.

Working Together

By: Richard Carnes- President & CEO 

In response to a question about success Henry Ford stated, “Coming together is a beginning; keeping together is progress; working together is success.” When I contemplate this quote, I see many ways Southern Baptists have lived this statement through thousands of Baptist churches and millions of Baptist members, by choosing to voluntarily cooperate and combine their efforts for the building of God’s Kingdom. One of the most obvious examples of this collaboration is the Cooperative Program. The Cooperative Program enables Southern Baptists to accomplish more for Christ together than we ever could on our own. Cooperative Program funds provide the foundational support for statewide, national and global missions and ministry efforts.

May I invite you to join a special group of individuals who have designated future gifts to this vital ministry funding source? These gifts will help ensure future missions, evangelistic, educational and care giving ministries and help enrich and save lives for many years to come. Your legacy gifts directed for the benefit of the Cooperative Program are an investment with eternal implications that will be working 24 hours a day, 365 days a year, to connect people all over the world to Jesus Christ.

As Southern Baptists, we can rejoice that we’ve “come together,” “kept together,” and “worked together” through the Cooperative Program. When you consider how you may choose to support the Cooperative Program, I encourage you to talk with your legal and tax advisors who can assist you in determining which legacy gift strategies best achieve your giving goals in light of your overall estate and financial plan. Some examples of these legacy gift plans include a bequest within your will, a beneficiary designation within your life insurance plan, a charitable remainder trust or a charitable gift annuity, just to name a few.

The Kentucky Baptist Foundation’s trust counsel, Laurie Valentine, and I are available to provide you additional information on the Cooperative Program and other Baptist causes which may be of interest to you. Call us at our toll-free number (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.

What’s The Plan?

By: Richard Carnes- President & CEO

The most likely reason people fail to plan their finances, especially the preparation of an estate plan may fall into the category of “life just gets in the way.” For some it’s “I’m too busy,” for others it’s the uncomfortable idea of planning to die, and for another group their reason may be “no one can know the future,” so why plan if things are just going to change.

The reality is, if we develop a plan, for our family vacation, a party at our home, a career change, and yes, stewardship plans for our family and our finances, these events will all go more smoothly and our lives may be less stressful.

The Kentucky Baptist Foundation strives to fulfill its Christian service mandate to individuals through a variety of educational efforts. One of the ways this is done is through the presentation of educational seminars within your local church. Examples of the seminars are as follows:

Estate Planning Mistakes and Solutions – Discover what the ten biggest estate planning mistakes are and how to avoid them to assure your make the most of what you have.

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.

Legacy Giving Ideas – Ways to give that benefit the giver as well as the charity – gifts of appreciated assets; gifts of life insurance and retirement assets; and life income gifts.

Ask A Lawyer – The Foundation’s attorney, Laurie Valentine, is ready to answer your estate planning, incapacity planning, long-term care planning and charitable gift planning questions and … there’s no “meter” running.

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 should give.

These topics and more are available as no-cost stewardship education seminars that can be conducted at your church. The Kentucky Baptist Foundation’s trust counsel, Laurie Valentine and I will welcome your invitation. 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.

Real Estate Gifts

By: Laurie Valentine- COO & Trust Counsel

Do you own a vacation home or other real estate you no longer want to use or manage? And, have you have been thinking about making a legacy gift to your church or other charitable cause? If your answer to both questions is “yes” consider using that real estate to accomplish your legacy giving objectives.

An outright charitable gift of real estate that has appreciated in value can provide double benefits----an immediate income tax deduction equal to the current market value of the property and avoidance of the capital gains tax you would owe if you sold the property.

If the property’s value has depreciated, a sale of it by you followed by a gift of all or a portion of the sale proceeds to charity may provide both a charitable contribution tax deduction and a capital loss deduction on your income tax return.

If you are not comfortable with giving up the full value of the real estate, a bargain sale to charity may be the answer. With a bargain sale you agree to sell the real estate to the charity for less than its current market value. The transaction is part charitable gift (the difference between the market value and the sale price) and part sale (the difference between the sale price and your cost basis in the property). You recognize capital gains on the sale portion of the transaction, but only for the difference between your cost basis in the property and the actual sale price. A charitable deduction is allowed for the value of the gift portion of the transaction.

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.

Beginning The Journey

By: Richard Carnes- President & CEO

It is with great excitement and a tremendous sense of responsibility I begin my journey with the Kentucky Baptist Foundation. First I want to express humble gratitude to our Lord and Savior Jesus Christ for entrusting this Kingdom work assignment to me. I ask for your prayers that I will daily commit my energies to His work with all persons He brings into my path as I travel the Commonwealth of Kentucky, sharing the message of the Foundation and its legacy giving services.

Second, I wish to express appreciation to the Foundation’s search committee and its chairman Willis Henson, the Foundation’s Board of Directors and its chairman Charles Barnes, for their vote of confidence in offering me the opportunity to serve alongside them in leading the legacy stewardship ministry of the Foundation. The professionalism and thoroughness of their search process is a model that all organizations, both nonprofit and corporate businesses would be well served to emulate.

Also, I am honored to serve with an incredibly talented and committed group of Foundation staff, Janet McIntosh, Barbara Spencer, Katrina Umphrey and Laurie Valentine. Each of these ladies is dedicated to helping individual Kentucky Baptists who are seeking to live out their stewardship obedience to Jesus Christ through their legacy gift decisions.

I want to express my sincere thanks to all the current Kentucky Baptist Foundation clients, including individuals, churches, Baptist institutions and the KBC Mission Board that have entrusted the Foundation with the management and administration of funds to benefit the wide array of ministries being conducted by Southern Baptists across Kentucky, the United States and around the world.

As so ably stated many times by Dr. Barry Allen, the former president of the Foundation, “we look forward to extending to you the services of Kentucky Baptist Foundation, to facilitate the stewardship of that which the Lord has entrusted to you to use for His purposes.” What a great way to begin the “Journey”!

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

12 Creative Giving Ideas for 2015- #6

By: Laurie Valentine- COO & Trust Counsel

Do you own a vacation home or other real estate you no longer want to use or manage? And, have you have been thinking about making a legacy gift to your church or other charitable cause? If your answer to both questions is “yes” consider using that real estate to accomplish your legacy giving objectives.

An outright gift of real estate that has appreciated in value can provide double benefits----an immediate income tax deduction equal to the current market value of the property and avoidance of the capital gains tax you would owe if you sold the property.

If the property’s value has depreciated, a sale of it followed by a gift of all or a portion of the sale proceeds may provide both a charitable contribution tax deduction and a capital loss deduction on your income tax return.

If you are not comfortable with giving up the full value of the real estate, a bargain sale to charity may be the answer. With a bargain sale you agree to sell the real estate to the charity for less than its current market value. The transaction is part charitable gift (the difference between the market value and the sale price) for which you may take an income tax deduction and part sale for which you realize capital gains only for the difference between your cost basis in the property and the actual sale price.

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.

New Mission For New Era

By: Charles Barnes, Chair
Board of Directors

At the request of the Kentucky Baptist Foundation Board of Directors, the Kentucky Baptist Convention, at its 2013 convention, approved changing Kentucky Baptist Foundation’s purposes as defined in its Articles of Incorporation. The three main purposes now are as follows:

1) To serve as the development agency for cooperating affiliated KBC churches, but not limited to, promoting legacy gifts to and administering funds for such churches.

2) To promote legacy gifts for the benefit of the Cooperative Program.

3) To further develop religious, benevolent, charitable, educational, and missionary activities by serving, administering funds of, and promoting any institution, agency, association, or enterprise fostered by or having official sanction of the Kentucky Baptist Convention.

The Foundation’s new president, Richard Carnes, assumed his leadership role on June 1, 2015. He will begin a new era of ministry focusing on the local church and the Cooperative Program. These two causes are vital to the future growth of Kingdom work among Baptists and around the world. The church is the foundation on which the KBC builds all its ministry. The Cooperative Program is the key source of support for this ministry and cannot be “taken for granted.”

In order to be effective, Richard will need the support and cooperation of all KBC church pastors. There are two major things that you can do. One, spend some time with Richard and learn how the Kentucky Baptist Foundation can best service your church. The opportunities will differ among churches. Together you can determine the most effective approach. Second, begin to identify members whose commitment to stewardship would benefit by knowing how the Kentucky Baptist Foundation, at no cost, could help them realize their Christian stewardship commitment through legacy giving in a good estate plan, and to introduce them to Richard or Laurie Valentine, KBF’s Trust Counsel (502.489.3533 or 866.489.3533, toll-free KY only).

On behalf of our Board of Directors, I want to thank all Kentucky Baptists who allow the Kentucky Baptist Foundation to serve them and further advance all of our Kingdom works. Pastors, please join with us in partnership in this new era of service.

Give and Receive Growing Income

By: Laurie Valentine- CFO and Trust Counsel 

A charitable remainder unitrust (“CRUT”) is legacy giving plan that provides you and/or other family members a potentially growing distribution stream during the term of the trust, with the remainder set up to benefit one or more charities at the end of the trust term.

You set up a CRUT by creating an irrevocable trust and transferring cash, appreciated securities or real estate to it. The CRUT will pay you and/or others an amount each year equal to the payment rate designated in the trust agreement multiplied by the value of the trust assets, as revalued on January 1 each year. The minimum payment rate is 5%.

The trust term can be for the lives of the non-charitable “income” beneficiaries or a fixed term not to exceed 20 years.

The payment out to you and/or other non-charitable beneficiaries each year will vary---if the trust assets increase in value from one year to the next, the payment amount will increase; if the value goes down, the payment amount will decrease. The goal is to select a payment rate that will allow some growth in the value of the trust assets from year to year so that the payments grow, thereby creating a hedge against inflation over time in what you are receiving from the trust.

When the trust term ends, whatever remains in the trust is distributed to the charities you have named in the trust agreement.

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.

Ready to Serve

By: Charles Barnes, Chair 
Board of Directors

The Foundation’s new President, CEO and Treasurer, Richard Carnes, will assume leadership of its ministry on June 1, 2015. The Board of Directors strongly believes that Richard has the qualifications and experience to lead the Foundation’s stewardship ministry in an outstanding manner. I want to take this opportunity to better introduce him to all Kentucky Baptists.

First, it should be noted that it takes a special combination of ministerial and financial training to lead the Kentucky Baptist Foundation. Richard is a graduate of Southern Baptist Theological Seminary with a servant’s heart. He loves people and the Gospel. He understands the financial side of the Foundation’s mission by his experience and professional training. From 1988 to 1995 he was President of the Kentucky Baptist Foundation before going back home to Alabama to start the national WMU Foundation. For the last 18 years, he has been a Vice President and Senior Advisor to non-profit investment clients at PNC Bank.

Second, Richard has the natural ability to relate to all Kentucky Baptists who are potential clients and need guidance in making a legacy stewardship commitment to undergird the future Kingdom work of the local church, Cooperative Program, Baptist institutions, and other Baptist causes.

Third, Richard will have a very competent staff and team on board June 1 supporting him. Led by Laurie Valentine, Trust Counsel and Chief Operating Officer, the other members of the team are Barbara Spencer, Administrative/Public Relations Assistant; Janet McIntosh, Accounting Manager; and Katrina Umphrey, Office Assistant. Over the last 90 days as Interim CEO, I have personally seen how dedicated and effective these team members are each day.

In summary, with the leadership of Richard Carnes, the Foundation is positioned very well to serve you. I ask that you pray about your legacy giving opportunity and consider allowing the Kentucky Baptist Foundation to assist you in making your commitment. Richard and the staff will be ready to serve.

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

12 Creative Giving Ideas for 2015- #5

By: Laurie Valentine-Acting President, CFO & Trust Counsel

For many, one of the largest assets they may own is their retirement account. And, unlike almost any other asset you own, there is potential for a double tax “hit” on the transfer of retirement assets at your death.

The value of your retirement accounts is part of what is counted in determining if your estate owes any federal estate tax (first tax “hit”) and, if you family is named as the beneficiary/new owner of the retirement account when they take funds out they will have to pay income taxes on what they take out (second tax “hit”).

To avoid the double tax hit, consider using all or a portion of a retirement account to fund the legacy gifts you want to make at your death. The portion passing to charity provides your estate an estate tax charitable deduction and, since the charity is tax exempt, the charity does not have to pay income taxes on what it receives from your retirement account.

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.

Inheritance: What Kind Are You Bequeathing?

By: Barry G. Allen

The matter of inheritance is exceedingly important and a crucial concern in the dynamics of family life today. Parents consider at length what kind of inheritance they want to pass on to their children. And, children, in turn, when they attain a certain age, ponder what they are going to inherit from their parents. The familiar and favorite parable of the wise father and the prodigal son (Luke 15:11-24) is the finest example I know of the kind of inheritance I would like to give as a parent and receive as a son.

To clarify what this parable teaches us two common misconceptions must be addressed and set aside. The first is an inheritance is something parents leave their children after they have died. However, if you think about it, this is far too limited a concept because parents begin bequeathing an inheritance to their children the moment the child is born in the sense of passing on certain life experiences and values that surely will shape that child’s existence. So, the request of the prodigal was not as brash as it first appeared. Like any young adult leaving home he gathered up whatever inheritance had been shared with him and began transacting with life out of that legacy. As parents it is imperative we not wait until the end of life to consider what kind of inheritance we want to leave.

The second misconception is an inheritance consists only of money or physical property, which also is a far too restricted view, because an inheritance stands for all parents transfer to their children in terms of opportunities, values and a whole vision of life. This is not to imply the economic side is unimportant, because it is very important. But it is not everything, and a child is poor indeed whose parents do not realize this and seek to bequeath only a monetary estate. A child needs more from parents than money bequeathed at death, and this is why the father of the prodigal is so worthy of our attention. And, what makes it doubly important is this father is a reflection of our Father in Heaven.

So, remember, it’s more important what you leave in them that what you leave to them. “Instill your values…before you give them your valuables.”

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

Barry Allen is the retired President and CEO of the KBF and currently serves as a consultant to the interim management team. This article published in this week's Western Recorder also appeared in a previous edition of the paper. 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.

Why Are Churches Overlooked?

By: Barry G. Allen

Why do church members overlook their churches when making planned gifts? Planned gifts are gifts church members can’t put in the offering plate; they are gifts out of assets, not income; gifts made in light of the church member’s overall estate and financial plans; gifts that use tax-advantaged methods to accomplish the church member’s philanthropic objectives; and gifts that may require professional adviser assistance to complete.

Churches are the most overlooked charities in estate stewardship and planned giving. Church members are more likely to include in their estate plans or make a planned gift to a college, children’s ministry, human need ministry, the arts or a museum, but not a church.

We have discovered through assisting individuals and families the most likely reasons church members overlook their churches are these. First, they are never asked by their church leadership even to consider including the church in their estate plan or to make a planned gift during life. Second, most church members, even those who tithe out of their incomes, understand tithing as something one does during life, but not at death. Third, they lack confidence the church has the ability to administer such a gift. Fourth, they were unsatisfied with the effectiveness on the church’s ministry. Fifth, they did not have the level of esteem for the church’s leadership required to make such a gift.

Let me encourage you not to overlook your church in your estate stewardship. To the extent Laurie Valentine, our trust counsel, can be of assistance to you, please give her that privilege. Call her toll-free. There is no cost or obligation for this consultation service. Furthermore, she can suggest proven solutions for consideration in overcoming the obstacles others have mentioned as reasons they did not include their church in their plans.

Also, let me encourage you to visit our website at www.kybaptistfoundation.org for valuable charitable gift planning information, including an interactive estate plan organizer, which is a terrific secure and private data gathering, tutorial, decision-making tool.

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

Barry Allen is the retired President and CEO of the KBF and currently serves as a consultant to the interim management team. This article published in this week's Western Recorder also appeared in a previous edition of the paper. 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.

12 Creative Giving Ideas for 2015- #4

By: Laurie Valentine-Acting President, CFO & Trust Counsel

Using life insurance to make a legacy gift allows you to make a larger gift than you may have ever dreamed possible. That’s because the premiums you pay are generally significantly less than the life insurance death benefit.

There are two ways to make a legacy gift with life insurance. You can name the charity the primary or contingent beneficiary of the policy or you can transfer ownership and all rights in the policy to a charity.

Naming one or more charities as the primary or contingent beneficiary of a life insurance policy is simple. Doing that provides no current tax benefits to you, but does set up a plan to fund a potentially significant gift to the named charitable beneficiaries at your death for which your estate would get an estate tax deduction.

Transferring ownership of a life insurance policy to charity is a charitable contribution for income tax deduction purposes. If the policy is paid-up, the charity holds it until you die and collects the death benefit. If premiums are still due on the policy, cash gifts you make in future years to the charity to provide the funds for premium payments are additional charitable gifts. If you get to the point you can no longer provide funds for future premiums, or don’t want to do that from the outset, the charity can cash in the policy or adjust the death benefit to take it to “paid up” status.

Leverage your legacy giving through a life insurance gift.

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.

Give to God and Caesar

By: Barry G. Allen

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 the KBF at (502) 489-3533 or toll free in KY at 1(866) 489-3533.

Barry Allen is the retired President and CEO of the KBF and currently serves as a consultant to the interim management team. This article published in this week's Western Recorder also appeared in a previous edition of the paper. 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.

Giving without “Strings”

By Laurie Valentine-Acting President, CFO & Trust Counsel

If making a simple gift now without keeping for yourself any rights or interest in what you give sounds like something you want to do, an outright legacy gift to your church or other charitable cause is the type of charitable gift that will accomplish that objective.

An outright legacy gift is a gift of an asset to charity during your lifetime. The charity becomes the full owner of what you give it and you have no further right to income or anything else from the asset you give.

Any type of asset may be used---cash; stocks; bonds; mutual fund shares; real estate; cash value life insurance policies; and interests in business.

Using appreciated assets to make an outright legacy gift can provide several benefits including a charitable income tax deduction based on the current market value of the gifted asset (if you’ve owned it for at least a year) and avoidance of the capital gains tax that would be incurred if you sold the asset.

Make a lasting difference for the cause of Christ in this world through an outright, “no strings attached” legacy gift to your church or other Christian cause.

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.

A Christ-centered Will

By: Barry G. Allen

New Testament professor R.E.O. White taught the permanent value of Paul’s letter to the Colossians is its value both as a theological feast and a spiritual tonic. Paul’s purpose in writing was both to instruct a questioning faith and to enrich daily Christian life. Both the fullness of Christ and the Christ-filled life are affirmed by Paul. His fullness is affirmed in relation to God, the universe, the church and experience.

As disciples of Jesus Christ, we strive daily to reflect a Christ-filled life. In Colossians 1:16, Paul acknowledged “all things were created by Him and for Him” to fulfill His purposes and to promote His glory. How we plan our estates very likely will be the single most important act of financial stewardship we will ever make. Therefore, it is vitally important we acknowledge and affirm His Lordship in our lives with a last will and testament that is Christ-centered. Through faithful estate stewardship we impact the world for Jesus Christ, we advance His Kingdom and we acknowledge His Lordship. Furthermore, obedience in this realm and writing a Christ-centered will enriches our daily lives as we find contentment in knowing the financial resources He entrusted to us in life will be used in fulfilling His purposes and promoting His glory beyond our lives on this earth.

A bequest in a will or revocable living trust for the benefit of your church and other Christian causes is the simplest and most popular way to have a Christ-centered will. The bequest can be a specific sum, percentage or asset; it can be undesignated or designated; it can be outright or for perpetual support through an endowment fund. The reason a bequest is so popular is it allows one to retain complete control and use of the financial resources until death when they are no longer needed.

In 1 Timothy 6:7 Paul reminds us financial resources are temporal; they provide for our basic needs, but we must put godliness above everything else: “For we brought nothing into this world and we can take nothing out of it.” When you and I gain that truth, we gain something lasting.

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

Barry Allen is the retired President and CEO of the KBF and currently serves as a consultant to the interim management team. This article published in this week's Western Recorder also appeared in a previous edition of the paper. 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.