1 / 31

Gift Planning Opportunities

Discover effective investment and charitable giving strategies with expert guidance from KSU Foundation's Gift Planning Department. Learn how to maximize income, reduce taxes, preserve assets, and plan for the future. Find solutions tailored to your specific needs.

adeliner
Download Presentation

Gift Planning Opportunities

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Gift Planning Opportunities KSU Foundation Gift Planning Department Lori Rogge, CAP Darci Cain, CTFA

  2. Consider Gift Planning: • Investments • Strategies • Charitable Giving

  3. Early Retirement Charlie and Elaine Caus Charlie – 60 – Mgr Hardware Store Elaine – 60 – HR Director of Packing Plant 401(k)’s $1,000,000 Stock 500,000 Rentals 325,000 Home 200,000 Savings 50,000 UL Charlie 250,000 UL Elaine 250,000 No Children Charlie’s Nieces (Tara – 10; Sidney -15)

  4. What strategies would you suggest for Charlie and Elaine to increase their income? • Utilize 401(k) and SS now • Selling stock-reinvest at higher dividends • Gifting stock to CRUT or CGA • Partial Retirement • Sell property-reinvest • Utilize net unrealized appreciation w/co stk in 401(k) • Rental income • Cash value on UL policies possible 1035 exchange

  5. What unanswered questions would you ask of Charlie and Elaine? • Philanthropic intent • Estate Issues—contingent beneficiaries • LTC • Education coverage for girls • Health insurance coverage • Intent of rental properties, marketable • Value of home • Cost of travel • What does retirement mean (never working again)? • Rental income • Debt on rentals • Gifting to girls • CV of LI—premiums on policy

  6. How would you help Charlie and Elaine keep their taxes as low as possible? • CRUT • CGA • Outright gifts • Stock basis—how to handle gifted vs. purchased • 1035 Exchange • Diversify portfolio with tax exempt securities • Life insurance • Highly appreciated stock • Minimum funded LI w/o MEC

  7. Consider Outright Gift: • Reduce tax (plus cash from gift/sale) • Bypass gain on gift • Deduction offsets tax liability

  8. How would you suggest Charlie and Elaine preserve their assets in the event of their incapacitation or death? • Wills • Trust • DPOA • Living Wills • LTC • Beneficiary designation • Distribution of property • Life Insurance • 401(k) beneficiary—charity or nieces

  9. Consider Beneficiary Designations: • Maintain control during life • Charitable intentions • Desire estate tax deduction • Does not want $ given to IRS

  10. What options would you offer to Charlie and Elaine regarding their philanthropic intentions? • Life Estate • Bargain Sale • Donor Advised Funds • CGA • CRUT • CLUT • IRA Rollover if available • Term insurance • Second to die policy • Need to determine how much income they have from rental—is gifting possible?

  11. Consider a Life Estate: • Current tax deduction • Preserves lifetime use • Transfer to charity without probate • Reduces estate tax • Possible conversion to trust for income later

  12. How would you suggest providing for Tara and Sidney’s college education? • Mutual funds • 529 Plan • Life Insurance • Stock • Roth IRA • Sell rental properties • Annual gifts • EE Bonds • UGMA/UTMA • College Education Unitrust/Annuity Trust (kiddie tax) • Work study • Scholarships and financial aid

  13. BREAK TIME

  14. Land Strategies and Investment Opportunities Bob and Sue Land Bob – 68 – Farmer Sue – 72 – Teacher 2K Acres Land $2,000,000 Home + 20 acres 350,000 SEP 300,000 Savings 50,000 Grain 300,000 Machinery 500,000 50 hd of Cattle 50,000 UL Policy - Bob 250,000 UL Policy – Sue 250,000 Sue – son Steve (father deceased) 2 grandchildren Bob & Sue - Cara

  15. Credit card- what is interest rate, is this a recent purchase, making min. payments or long term balance, reason for debt? Use money in savings to pay debt Possible to use SEP proceeds- but will be taxable Are there any tax benefits for the mortgage? Depends on itemized deductions Could use savings, cattle, land or machinery to pay off debts. Land purchase- debt on purchase Improvements made on the property? What recommendations do you have for handling their debt?

  16. How could Bob and Sue receive income during retirement? • KPERS-income, lump sum or combo • SEP • Sale of land, cattle, machinery, grain (consider storage fee) • Investments from the sale of land, cattle, etc. • Need for deductions if selling assets • CRUT, CGA • Social Security • Land Lease- Cash rent- Share Crop (wind farm; recreational assumptions) • SPIA • Borrow on LI

  17. Bypass capital gain Increase income Receive a current charitable income tax deduction May deduct 30% (appreciated property gift) to 50% (cash gift) of your AGI in the year of the gift, carried forward for five years if needed Reduce federal estate taxes Diversify assets Utilize professional asset management Consider a Charitable Trust:

  18. What considerations should Bob & Sue explore as they liquidate their land, cattle and machinery? • Recapture, depreciation • Capital gains • Value of machinery at auction • Price of cattle • Charitable options • CRUT, outright gifts-ILIT wealth replacement • How much land do they want to keep? • Will they keep the house or move? • 1031 exchange • Conservation easement • Cash rent/Share crop • Debt consideration • Family use of land (emotional issue) • How much income will they produce from sale of land, cattle and machinery? • Consider tax implications of selling

  19. What types of estate issues do you foresee for Bob and Sue? How could they be rectified? • What plans are in place? • Titles of assets-corporations; farm • What amount left to heirs & grandchildren • Will there be different amounts to kids • Education of grandchildren • Cara vs. Steve • Estate taxes- Annual reviews • Gifting to children or charity • Move the LI to ILIT • Bequest, outright, CRUT, wealth replacement • Beneficiary designation of SEP (IRD) • Lead Trust (CLUT) • Life Estate • Roth rollover • Estate rates • Exemptions • Recapture

  20. Consider a Charitable Lead Trust: • Receive charitable deduction • Donor not taxed on trust income (non-grantor) • Reduced gift/estate taxes • Assets returned to family

  21. What income vehicles would you recommend as they enter retirement? • KPERS • Annuities, Mutual Funds, REITs • SEP • Lease/sell land- mineral rights, water, gas, oil • CRUT, CGA • Discuss timing of asset liquidation • Social Security • Cash value of LI • 1031 Exchange • Income now? • Title of land • Stay on farm? • What do the children want?

  22. Consider a Charitable Gift Annuity: • Provides supplemental payments for life • Partially tax-free payments • Portion of capital gains tax pro-rated • Receive a current charitable income tax deduction

  23. What key information do you need to help Bob and Sue make the best financial decisions? • Financial background-current income-future income needs (travel) • Land • Title of property • Trustee • Current plans-will/trust/POA • Risk tolerance-investment philosophy • Tax status • Family information-relationships between children- grandchildren • Charitable intent- by both • Retirement living • LTC • Beneficiary • Health status • Location of land • Social Security • Private school

  24. THANK YOU!

More Related