Tuesday, May 19, 2020

A Place to Start

By: Richard Carnes

When working with individuals seeking guidance from the Kentucky Baptist Foundation, we are often asked for suggestions on how best to begin a person’s estate planning process. We suggest using the following four steps as a framework for organizing your thoughts.

People

The people in your life are central to the planning process. List those individuals for whom you are now financially responsible and those whom you would like to assist in the future. This is also the place where you could list your church, and other Christian ministry causes as part of your “family.”

Property

Next, we suggest listing your property. Think of everything you own, including financial assets and tangible property. Begin with income from all sources (salary, investments, rental property, etc.) Also include any current balances in pension plans, individual retirement accounts (IRA’s), 401K plans and other retirement plans. Beside each asset, list its current value. Next to its value, list its cost. Finally, note whether it is owned outright or with others.

Plans

Your plans begin to take shape as you review the list of persons and consider how you wish to provide for them. Study the various assets you listed to determine which ones may match the needs of each person or charitable cause you identified as important to you.

Planners

At the top of the list of planners will often be an attorney and an accountant. Your attorney drafts your will and other legal documents. Your accountant can provide valuable advice on tax matters as well as other estate planning issues, in consultation with your attorney. Others who may participate include life insurance professionals, financial planners, real estate professionals and trust officers.

The Kentucky Baptist Foundation is honored to work with individuals seeking how best to organize their planning goals to achieve their personal and charitable objectives, to support their families, their church and other Baptist causes.

To learn more, call upon the Kentucky Baptist Foundation as a helpful partner.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; 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.

Monday, April 13, 2020

The Secure Act and the Charitable IRA Rollover Gift (QCD)

By: Richard Carnes

The “Setting Every Community Up for Retirement Enhancement” Act, aka the SECURE Act, was signed into law on December 20, 2019. The SECURE Act, which went into effect on January 1, 2020, changes many of the rules governing retirement plans, including several provisions relevant to making charitable IRA rollover gifts (also known as qualified charitable distributions or QCDs.)

Under the SECURE Act, the charitable IRA rollover, or QCD, remains a terrific way to make a tax-free gift to your church and Baptist ministries using your traditional IRA.

How Do I Qualify?

· You must be 70½ years old or older at the time of the gift

· Gifts must go directly from your IRA to the qualified charity

· Gifts must come from a traditional or Roth IRA account

· Gifts cannot exceed $100,000 per donor per year

· You cannot receive a benefit in return for your gift, such as tickets to a gala

Benefits of a Charitable IRA Rollover Gift (QCD)

The SECURE Act increased the age at which you must start taking required minimum distributions (RMDs) from 70½ to 72. Once you reach 72, one of the great benefits of a QCD is that it will count towards your RMD. However, even if you have not reached age 72, there are still good reasons to consider a QCD at 70½. First, a QCD offers all the benefits of an income tax charitable deduction, even if you don’t itemize your deductions. You can’t claim a deduction for your QCD, but your QCD is not included in your income. Your QCD is always a tax-free gift.

Another change brought on by the SECURE Act is the elimination of the stretch IRA for many beneficiaries. With a few exceptions, children and other non-spouses who are more than 10 years younger than you no longer can stretch their withdrawals from an IRA they inherit from you over their life expectancy. Instead, they must withdraw and pay income tax on all funds within 10 years. This change means that it may be most tax efficient for you to support Baptist ministries and provide for your heirs by making QCDs during your life and setting aside other assets to pass on to your loved ones.

To learn more, call upon the Kentucky Baptist Foundation as a helpful partner.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; 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.










Thursday, February 13, 2020

A Gift of Love

By: Richard Carnes

February is filled with reminders to express our love and affection to those close to us. We may express this affection through greeting cards, bouquets of flowers and candle lite dinners. All these gestures can be memorable, but they are temporary in nature.

A lasting way to say “I love you” is by making provision to care for your loved ones, yourself, and charities important to you through creating a written estate plan. Knowing where to begin, what to look for, and what you might expect can help turn this task into an effective plan. A great place to start the process of creating an estate plan that reflects your goals and values is through the Kentucky Baptist Foundation’s Estate Plan Organizer, located on our website, KYBaptistFoundation.org. The Estate Plan Organizer will take you through the estate planning process easily and at your own pace. The whole process can be completed in as few as 30 minutes and you can save your work at any time and return to the Organizer at your convenience.

When you have completed the Organizer, you will have a well thought out design for your estate that reflects your priorities. You will then be well prepared to work with your attorney and financial advisors, who will assist you in structuring an estate and financial plan that best achieves your goals.

An estate plan may not be a glamorous gift, but it is a valuable gift… a gift of love.

The Kentucky Baptist Foundation is honored to work with individuals seeking how best to organize their estate planning goals to achieve their personal and charitable objectives, to support their families, their church and other Baptist causes. To learn more, call upon the Kentucky Baptist Foundation as a helpful partner.

Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; 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.






Thursday, January 16, 2020

Life Decisions

When composing or updating wills and estate documents, a couple will naturally discuss how to divide their estate. Many questions arise during these discussions. Do you leave equal amounts to your children? Will each child be a wise steward of the inheritance or have they proven irresponsible with money? Do you include any provisions for legacy gifts to the charities with which you are connected?

These are difficult questions, and adults often delay creating or updating a will to avoid answering them. As we wrestle with these questions, keep the following in mind:


  • During their lifetimes, parents often give unequal amounts to children based on different needs – but they hesitate to leave unequal bequests, for they don’t want their last words to seem to convey unequal affection. 
  • If you do plan to leave unequal bequests to your children, talk to them while you are living: explain what you are doing and why. 
  • You can treat children and family members fairly without providing for them in the same way. For example, a prudent way to provide for a family member who is unsophisticated with money is through a trust from which the family member will receive regular income but have limited access to principal of the trust. 
  • Your Christian values can be a part of your estate legacy. By including Christian ministries in your estate plan, you set an example to your family and community of your commitment as a Christ follower. 
The Kentucky Baptist Foundation staff works to help clients achieve their personal and charitable goals, including how to provide for their families and support their church and other Baptist causes. We cannot relieve you of the hard choices you have to make when dividing your estate among children and other family members, but we can assist you with ways to make estate gifts to fulfill your family and charitable objectives. To make intentional plans for your family and the ministries God is inspiring you to support, call upon the Kentucky Baptist Foundation as a helpful partner.



Richard Carnes is president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; 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.