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.