Planned Giving: An Expert Weighs In

‘Tis the season…to celebrate and to give back. One lasting way you can give back to a favorite charity is by making a Planned Gift. Attorney Ken Kossoff of Panitz & Kossoff, LLP is an Estate Planning, Probate and Trust Law Specialist. He is also a long-time TWCVV Board member and has been kind enough to share his expertise on Planned Giving and whether it may be an option for you.

I very much encourage clients to consider planned giving. Not all people do so. However, for those who believe their children or other family members are getting enough or have received enough during their lives, or for those people who have no children, gifts to charities are a wonderful way to leave a legacy – even if you want to do so anonymously. And for taxable estates, charitable giving allows the donor to control where their money goes, rather than leaving that to the US government to decide.

There are a number of planned giving options. Before I discuss them, I want to remind everyone that a gift during one’s life, whether in cash, appreciated stock (so the donor does not have to pay capital gains taxes), real estate or other property, is a great way not only to support a charity, but to see how the charity manages and applies your gifts so you can get some sense of how the charity will manage a planned gift that is managed and spent after your passing.

Outright Gift: In terms of planned gifts, most charities would prefer an outright gift to the charity’s general fund. This can mean naming TWCVV as a beneficiary of your trust or will, as a beneficiary of a life insurance policy, or, as discussed below, as a beneficiary of a retirement account.

Gifts from Retirement Accounts: One recent form of gift that has been allowed by legislation, but will only be available for a short time unless extended by Congress, is to allow people to make a gift from their Individual Retirement Accounts directly, during life, so that the taxpayer does not first have to take a distribution from the IRA, pay taxes on the distribution, and then make the donation. There are a lot of people with substantial retirement accounts, and when the money is taken from those accounts, it will be subject to income tax – whether taken by the account participant (the person who put money into it) or by their heirs after the participant’s death.

With a substantial estate, retirement accounts also can be hit with the estate tax, which means that a retirement account can be decimated by the income and estate tax hit. Thus, charities make good beneficiaries of retirement accounts, because charities will not have to pay income tax on the amounts received, and for taxable estates, the participant’s estate will get an estate tax deduction for the value of the gift. It is important to make sure you consult with your attorney, CPA or financial advisor, because rules regarding retirement accounts are complicated.

Charitable Remainder and Lead Trusts: One popular gift structure is called a charitable remainder trust (CRT). During life, the owner donates an appreciated asset (stocks, real estate, etc.) to a trust they create, and gets a tax deduction for the donation. The CRT pays no capital gains taxes and invests all of the donated property for the donor; if the donor had sold the assets and invested them herself, the amount invested would be after capital gains taxes that the CRT does not have to pay. During the life of the donors, or for a term of years, the income generated by the trust is paid to the donor. A CRT leaves the “remainder” – what’s left after the death of the donors or the term of years – to a charity.

Finally, for people with more than $1,000,000 to donate, private foundations can be very useful. Putting aside the good that large amounts of money can do those in need, private foundations provide families with the opportunity to involve younger generations in identifying worthy charities, and overseeing how the charitable dollars are spent.

After hearing about the many charitable options – and these are not all of them – some people employ one of them, others employ more than one, and others employ none of them and just write a check to the charity. Any decision involving a substantial gift should be made in consultation with your professional advisors.

To learn more about leaving a legacy to support the mission of TWCVV, please click here or contact president Suzanne Drace at 805-371-0417.

Remembering Nancy

In October of 2006, one year after being diagnosed with breast cancer, Nancy Colton wanted to give back to the fight against cancer. Along with her mother, Harriet Wasserman, Nancy decided to hold a Breast Cancer Awareness luncheon to raise funds for a cancer support charity. Six years later, that luncheon has grown into a beloved tradition of generosity and a way for Harriet to uphold the memory of her daughter, who we sadly lost in 2009.

On October 22, Nearly 80 women gathered at the home of Harriet’s friends Debbie and Scott Steinhart for the Sixth Annual Luncheon. The group included longtime friends, family members, and fellow support group members from The Wellness Community Valley/Ventura (TWCVV). This year, the funds raised at the luncheon were donated to TWCVV, where Nancy and Harriet found hope and friendship through support groups, yoga, and other programs when Nancy was going through treatment. So that more of the funds from the luncheon could go directly to TWCVV, all of the food was donated by two catering companies that Harriet’s son is involved in: Bruce’s Catering and Lunchbox.

Since her election to the Board of Directors in 2006, Harriet has been a champion for TWCVV through her leadership and constant dedication. “I really enjoy being on the Board, and I look forward to each fundraising event to help keep the doors of TWCVV open,” says Harriet. When asked what keeps her motivated to take on the planning and hosting duties of the luncheon each year, she says, “My motivation is to keep giving back in Nancy’s name and to keep her memory alive.”

Nancy’s memory was ever-present at this year’s luncheon, in the minds of all the women who attended, and in the words of a speech she had first given three years ago, which Harriet repeated. Nancy’s sense of humor jumps off the page, but she also manages to make the poignancy of the gathering come alive with just a simple sentence at the end.

Below is Nancy’s speech from 2008, read by Harriet at the 2011 luncheon:

As I look around today we have gathered together quite an eclectic group of women. There are women here that have been friends with my mom since they were kids growing up, women who have known me since I was a kid growing up. There are women that I’ve been friends with for close to 30 years whose wedding and baby showers we attended. There are friends from the office, friends from the “hood,” friends who I share with on a weekly basis as part of my support group at TWC. There are people here that don’t know me at all, or have met me only once at an event. And there are family members and friends of my mom or mine who were inspired to bring some of their friends along today.

Now some of you that were here last year may be back hoping that my brother again made his famous bread pudding. He did. And there may be some who are here because of the chance to win one of the coveted raffle prizes, there are many. But I believe the truth is you are here because there is a special bond, a unique energy that is truly powerful and empowering when we gather together a group of women to help our mothers, daughters, sisters and friends.