Beyond Checkbook Giving

By: Barry G. Allen- President & CEO  

           Most Christians tend to support the mission of their church and other charitable organizations by writing a check and placing it in the offering plate or sending it through the mail.  Checkbook giving also tends to be giving out of one’s income without regard to certain non cash assets the Lord has entrusted to us.

            If you think about it for a moment, the noncash assets the Lord has entrusted to you likely have greater value than the cash assets He has entrusted to you. Noncash assets consist of real estate, stocks, bonds, mutual fund shares, business interests, retirement plan assets and life insurance cash surrender values. These non cash assets cannot be placed in the offering plate on Sunday morning, and may require the assistance of a professional adviser in making charitable gifts.  Using noncash assets for charitable giving typically is done as part of one’s overall estate and financial planning and may take advantage of certain tax-advantaged methods to accomplish one’s giving objectives.

            Noncash assets can be given in a variety of ways and at various times over one’s life.  They can be given outright, by bequest in a will or trust, by beneficiary designation of retirement plan survivor benefits and life insurance death benefits, and by payable on death provisions of bank and brokerage accounts.

            Since all of our possessions belong to the Lord, who has entrusted them to us to manage and to use according to His purposes, it behooves us to consider prayerfully “giving beyond our checkbooks.”  Furthermore, the financial resources required to advance the Kingdom in the future depends upon it.

            There are two ways the KBF can be helpful in educating and enabling you to move beyond checkbook giving.  First, Laurie Valentine is available to you by telephone or a personal visit to provide helpful information and to answer your questions.  Second, Laurie and I are available to conduct a seminar in your church or older adult group.  Please call us; we want to help.

How to Give for Building

By: Laurie Valentine-COO & Trust Counsel

            Church building campaigns can provide a great opportunity for making the kind of gift you never would have dreamed possible.  The challenge is to develop a plan that allows you to give “above and beyond” your tithes and offerings, without feeling you have placed yourself in a “cash crunch”.

            Ben and Sally Moore were in just this situation recently.  Their church was in a capital campaign to raise funds for a family life center. The Moores wanted to do all that they could to meet the stewardship challenge presented by the campaign committee.  As they began to prayerfully consider what they could give they thought of the two rental houses they had owned for many years.  As a result of Ben’s recent retirement, the Moores were planning to do a lot of traveling in the next few years.  They had decided to sell the houses to free themselves from real estate management responsibilities and provide funds for travel.  Their concern with this plan was the large capital gains tax that they would have to pay when they sold the houses.

            An alternative for Ben and Sally is to combine an outright gift of a 1/10 interest in the two houses to the church for the building campaign with a gift of the remaining 9/10 interest in the houses to a Charitable Remainder Unitrust (“CRUT”) that will pay them a 10% unitrust payment each year for the next 15 years and the remainder to the church at the end of the 15-year trust term.

            If the two houses have a current market value of $120,000, the Andersons will be entitled a $12,000 charitable contribution deduction for the 1/10 outright gift, a $36,700 contribution deduction for the gift to the CRUT, and they avoid the capital gains taxes they would have incurred if they sold the property.  Over the next 15 years, they will receive a total of approximately $117,600 in payments from the CRUT (assuming a 7% average annual total return).

            The church receives an immediate gift for the building campaign of 1/10 of the sales proceeds when the two houses are sold.  It will also receive the remainder of the CRUT to fund an endowment for the upkeep and maintenance of the family life center at the end of the 15-year trust term.

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 Hybrid Giving Idea

By: Barry G. Allen- President & CEO

           You may desire to provide a perpetual stream of contributions for the benefit of your church, a favorite Baptist cause and/or other Christian ministries, but you are unable at this time to fund fully the perpetual endowment fund to make that happen.

            A flexible endowment fund, administered by the Kentucky Baptist Foundation, is an option worthy of your consideration.  It allows you to have a plan that establishes a permanent endowment fund over a defined, but flexible time period.  During this flexible funding period, you also make on-going contributions directly to the cause(s) you intend to benefit.

            A simple example would be to establish a flexible endowment to provide scholarship assistance for students to attend one of our Kentucky Baptist Christian education institutions.  To provide $1,000 of annual assistance the endowment fund would need to be $25,000 assuming a 4% annual distribution rate.  The distribution rate is not the same as the investment earnings rate.  The distribution rate takes into consideration the rate of inflation and the investment costs so the fund will have an inflation-adjusted growth to the principal over time.

Let’s assume you could establish the flexible endowment fund with a $10,000 gift, and you would agree to contribute the remaining $15,000 over the next five years.  Alongside your $15,000 pledge to fund fully the endowment, you also pledge to contribute directly to the institution during the funding period the difference in the $1,000 scholarship assistance and the distributable earnings from the invested principal in the endowment fund.  As you fund the principal of the endowment, the principal should grow in value to produce an increasing amount of distributable earnings, and therefore, your direct annual contribution to the institution should decrease.  Once the endowment has been funded fully with the $25,000, you would have no more responsibility to make contributions related to this flexible endowment.

Scholarship assistance is just one of many ideas that lend themselves to this hybrid giving idea.  Call Laurie Valentine or me toll-free for more information about how you can make a lasting difference with a flexible endowment fund.

Partners In Philanthropy- John And Kay Trisler

            John and Kay Trisler are among the finest of Kentucky Baptist couples.  They have lived their lives as ambassadors for Christ and distinguished themselves as servant leaders in a variety of ways through the Harrodsburg Baptist Church, Mercer Association and KBC-related ministries.

 John was born and reared in Harrodsburg, and Kay in Danville.  Kay lived near the FBC and was there every time the doors opened.  FBC is where Lottie Moon was a member during her years as a school teacher in Danville.

It was no coincidence that WMU would provide an important pathway for Kay’s servant leadership development and service from a GA to the Executive Director-Treasurer of Kentucky WMU.  Other servant leadership responsibilities include the Marshall Center for Christian Ministry board, Western Recorder board, KBC Committee on Nominations, Harrodsburg CLC Director, Mercer Association internship, and various roles in her church, association and Kentucky WMU.  She is a Southern Seminary graduate.

With an engineering degree from the University of Cincinnati and an MBA from Xavier, John enjoyed a successful 18-year career with IBM and another 13-year career with Lexmark.  From an IBM engineer in Danbury, CT to the VP of Manufacturing in Lexington, KY, and then to VP at Lexmark in Lexington, John distinguished himself as a servant leader in his professional life as well as in his church and community life.  He retired in 2001, only to be called two years later into public service as the Mercer County Judge Executive for six years.  He retired again July 31, 2009.

John has served as deacon chair, Sunday school teacher, and finance committee chair at Harrodsburg Baptist and on the board of the Harrodsburg Baptist Foundation and the Kentucky Baptist Foundation.

Kay and John have been married 48 years and have two married children: Stephen (Toni) and Amy Adkins (Tim), and three grandchildren: Jonathan Trisler, Kaysie and Ella Adkins. 

John Trisler served sixteen years over three different terms on the KBF board of directors.  Throughout those years of service, John shared the benefits of his wisdom, work and wealth.  He served faithfully and effectively on the executive, investment, and real estate committees of the board.  Recognizing his cool, calm, and collected leadership style his fellow board members also elected him to serve as chairperson.

               

Through the years, John and Kay have been most generous in utilizing the KBF as a fiduciary of funds they have given for the benefit of the various charitable causes in whose missions they wanted to invest for eternity, including the establishment in 1996 of the John D. & Kay H. Trisler Endowment in honor of their first grandchild, Jonathan Owen Trisler.  They established this perpetual endowment with an initial modest gift and continue to make periodic gifts to increase the principal for investment to increase the earnings for distribution to the charitable beneficiaries they designated.  Those beneficiaries are Kentucky WMU for its Heritage Fund uses, the Marshall Center for Christian Ministry and the Kentucky Baptist Foundation.

               

John and Kay have stated, “We see the mission of the KBF as a way for us to make stewardship decisions by the establishment of endowment funds that help provide perpetual financial benefits to our choice of many Kentucky Baptist causes.  We encourage others to take this opportunity to praise God and help other people and organizations in our state.”

               

May the Lord add His blessings to their lives and to the multitudes that will benefit from their generosity until Jesus comes again.  And, may more of us seek to emulate the example of the stewardship of their lives and the financial resources the Lord has entrusted to them to manage in His behalf.

               

                Contact Laurie Valentine at 502-489-3533 and 866-489-3533 (Toll-free, KY only)
or Barry Allen at 502-489-3421 or 866-489-3421 (Toll-free KY only) for assistance in how you can provide perpetual benefits to the causes which are near and dear to your heart.     

Estate Tax Roller Coaster

By: Barry G. Allen-President & CEO

     

       The 2010 Tax Act signed into law by President Obama in December represented the most significant change in the estate tax rules in more than a decade.  As a result, it is extremely important for us Christians to understand the impact of the changes in the estate tax rules on our financial circumstances and our stewardship responsibilities and plans.  After all, everything we have belongs to God, and He has entrusted it to us to manage in His behalf.  Furthermore, estate stewardship likely will be the single most significant and important act of biblical stewardship we shall ever make.  And, finally, through estate stewardship, each one of us can impact the world for Kingdom advancement, regardless of our financial station in life.

            The advice of the Apostle Paul is instructive in this context.  In 1 Timothy 5:8 Paul advised the early Christians then and advises us today to provide for our relatives, and especially our immediate family.  The correct sense of the translation “to provide” is the sense of “forethought.”  In other words, we are to take care of tomorrow today; we are to anticipate future realities and make plans for them now.  That’s what Christian estate planning is all about:  prayerfully seeking God’s will for how to steward what He has entrusted to you as it relates to your family, including your spiritual family.

            It is important to note the new estate tax rules end in 2012, and in 2013, unless there is action by Congress, the rules revert back to what they would have been in 2011, if Congress had not adopted the 2010 Tax Act.  Because of the ramifications of the 2010 Tax Act, we encourage you to review your estate plans and documents with your advisors.  We discourage any one from adopting a “wait-and-see” approach.  Do it now 

            Laurie Valentine, our trust counsel, and I are available to conduct a Christian estate planning seminar for your church or church group, which will provide helpful information about the estate tax rules.  Call us toll free.

Estate & Gift Tax Changes--Significant but Temporary

By: Laurie Valentine-Trust Counsel & Chief Operating Officer

The federal tax legislation signed into law on December 17, 2010, includes significant changes to the federal estate and gift tax laws. Unfortunately, those changes are not permanent---they are only effective for estates of persons who die in 2011 and 2012.

The federal estate tax exemption amount (the amount that you can pass to anyone any way at your death) has been increased to $5 million and the federal estate tax rate has been lowered to 35%.

The new law includes a provision allowing “portability” of any unused portion of the deceased spouse’s estate tax exemption to the surviving spouse. Under prior law, each spouse had to use all of their own federal estate tax exemption or lose it. That was usually accomplished by including a bypass trust to hold the deceased spouse’s exemption amount in trust for the surviving spouse. The new portability provision allows the executor of the estate of a spouse who dies in 2011 or 2012 to transfer the unused portion of the federal estate tax exemption to the surviving spouse without the creation of a bypass trust.

The unlimited step-up in federal income tax basis of inherited assets has been reinstated. Heirs who inherit assets or property that have increased in value from what the decedent paid for them get a “step-up” (increase) in the cost basis of those assets to their date of death fair market value.

Federal estate and gift tax rules have been re-unified. The federal gift tax exemption has increased from $1 million to the same amount as the estate tax exemption ($5 million) for gifts made in 2011 and 2012 and the gift tax rate for gifts above the exemption amount is the same as the estate tax rate (35%).

Now is the time to review estate plans created under prior federal estate and gift tax laws. Bypass trusts and other provisions required to save taxes under prior law may no longer be needed as a result in the significant increase in the federal estate tax exemption amount and the new exemption portability provision. Consult your estate planning adviser to ensure you have a plan the accomplishes your estate planning objectives.

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.

Disaster Relief: Offering Hope

By: Barry Allen, President & CEO

A hot meal prepared for a disaster victim, debris clearing for an elderly widow after a tornado, a hot shower for an emergency responder and a Christian witness shared with a disaster survivor – these are just a few of the many ways the Kentucky Baptist Disaster Relief ministry is offering the hope of Jesus Christ across Kentucky, throughout our nation and around the globe.

This important Great Commission ministry traditionally has relied upon (a) the selfless and self-sacrificing efforts of Kentucky Baptist volunteers, who love the Lord and desire to bring hope to those who find themselves in hopeless circumstances, and (b) the collective giving of churches through the Cooperative Program. However, in looking to the future, it is clear this traditional source of funding will not be sufficient to enhance and secure financially this critical ministry even as the need for it increases. As a result, the KBC Mission Board has authorized the establishment with the Kentucky Baptist Foundation of the KBC Disaster Relief Endowment Fund to receive contributions for the direct benefit of this ministry.

This endowment is a perpetual, irrevocable fund from which only the earnings will be used for disaster relief ministry. The principal will be preserved to provide the ministry with long-term financial strength and stability, until Jesus comes again.

Advancing the Kingdom in the future cannot be funded solely by us Christians placing our cash and checks in the offering plate on Sunday mornings. In the future it will require us to steward not only out of our income but also out of our assets. We call that legacy giving, which includes giving in light of one’s overall estate and financial plans and perhaps using tax-advantaged methods.

I like what Mr. Rogers (TV) once said: “The world tomorrow will belong to those who give it hope.” And, Jesus commissioned us “to go and make disciples.” I urge you prayerfully to consider a legacy gift for the benefit of Kingdom advancement through disaster relief. Call me to discover some giving options.