Have the Tough Conversation Your Loved Ones Just May Thank You for It
A 77-year-old retired Chief Facility Engineer, John has a decent IRA and some nicely appreciated securities he had wisely picked up during the internet boom. He’s been a Mason for 24 years and fully embraces charitable values.
When John’s wife passed away seven years ago, he was thankful their daughter, Steph, lived nearby so they could help each other through their loss. He recently invited Steph to lunch so he could explain the adjustments he was making to his estate and legacy plans. Since she is his Power of Attorney and Executor, he wanted to make sure she understood his intentions.
Throughout his life, John made his family a priority and found time to support his lodge, where he enjoys helping and donating at the annual blood drive they host. Having worked in a healthcare facility, he understands how important blood availability is to those in need.
In preparation for their lunch discussion, John wrote down several important items to make sure he didn’t forget to share them with Steph:
Notes:
1. What’s important to me?
Family, Lodge, Travel, Learning new things, Leaving a legacy
2. What’s changing?
Consider updating my bequest
(% Charity / % Family)
3. IRA
Discuss why I would give using a qualified charitable distribution
4. Insurance Policy Beneficiary Designation (Masonic Blood + Organ Donor Program)
5. Charitable Gift Annuity
Appreciated Stocks - No capital gains tax & 7% payout rate
After they ordered their meals, John began the conversation. “Steph, I want to share my plans with you, so you understand what is important to me.”
Relieved, Steph replied, “Dad, I appreciate that more than you know. I’d rather hear it from you now than have to figure it out someday without you to guide me through it.”
Once they were finished eating, John pulled out his notes and an article he had read online before designing his plan.
“I’ve been blessed with a good life, and as you know, my family and my lodge have always been important to me,” he said. “I’ve jotted down what I’m considering for my legacy to both you and my favorite charity.”
After discussing his thoughts with Steph, John reviewed the tips he garnered from the article to help him make some decisions.
FOUR TIPS FOR BECOMING
A Savvy Donor
Plan for the Future.
Being strategic in creating multi-year giving strategies will gain you various individual, financial and tax-related advantages.
Leverage an IRA and Maximize Your Contribution.
What is a Qualified Charitable Distribution (QCD)?
If you are over the age of 70 ½, you can use your required minimum distribution this year as a charitable gift.
• Charitable Recipient: The donation must be made to a qualified 501(c)(3) charitable organization.
• Distribution Limit: The annual limit for QCDs is $108,000 per individual.
• Tax Implications: QCDs are tax-free and don’t require itemizing deductions.
Note: It is helpful to inform the charity the QCD is being completed to ensure timely processing.
Create a Legacy.
If supporting your favorite charity is a top priority, a legacy gift can be very impactful.
If you name your favorite charity as a beneficiary for your retirement account or insurance policy, 100% of your gift amount can be used to support the mission. For example, if you leave a charity 10% of a $100,000 IRA, it can use the entire $10,000. If you leave that same 10% to a loved one, they’d only receive the after-tax remainder of that gift.
Leaving a charitable bequest through your estate can create a legacy that lasts for generations. Charitable bequests are flexible and easy to update. You can write a bequest into a Will with a short paragraph, and if circumstances change, you can revoke it just as easily. An estate can deduct charitable bequests of cash, real estate, stock, IRAs, autos and other assets. Charitable bequests can help the efficiency of settling an estate because the bequests provide clear instructions to the executor on how to distribute certain assets designated to a charity.
If you are over the age of 60, a charitable gift annuity allows you to receive an immediate tax deduction for a portion of your gift, receive a lifetime income stream and benefit a charitable organization upon your death.
Develop a Meaningful Relationship with the Charities You Support.
Learn more about the charities’ needs and long-range plans so you can plan your giving strategy with those things in mind. Keep informed about trends and changes to giving strategies and any tax-related impacts.
By aligning your charitable plans with your values, planning carefully and staying connected, you can maximize your impact and be prepared for the future.
Father - Daughter Legacy Plan Conversation, Concluded
After reviewing John’s notes and the article tips, Steph felt confident that she understood her father’s wishes and his plan for executing them. She also felt good that her father would be extending his legacy through the Masonic Charities in addition to providing for her future.
“Knowing your plans has given me peace of mind and will help me know how to best approach my own plans for retirement and beyond,” Steph said. “Thank you, Dad.”
(from p. 1)
John smiled and replied, “To be honest, I was nervous about having this conversation, but now, I’m really feeling good about the legacy we’re creating as a family.”
When you are ready to create your legacy through plans for charitable giving, contact the Office of Mission Advancement and Development to learn more about how we can support your journey. We’re here to answer any questions or provide illustrations and examples for you and your advisor to consider.
Disclaimer: John and Steph are fictional characters, but their conversation and situation are common among our donors.
WE’RE A RESOURCE FOR YOU
Just heading home from my lunch with our financial advisor.
Be safe and see you soon! Also, did you read the new Mission Matters newsletter that just arrived last week?
No, not yet.
There’s an article about gifting to a charity using an IRA to avoid being taxed when we take our mandatory distribution.
Oh … we just write an annual check from our bank account.
Why do we do that when we can use our IRA instead? I thought our financial advisor would have mentioned that.
Looks like I need to read that newsletter when I get home.
Yes, I think so.
By the way, can you stop to grab some milk and bread on the way home?
Sure thing, Honey.
Want to avoid this text conversation with your spouse?
Contact the Office of Mission Advancement by calling
One Masonic Drive
Elizabethtown, PA 17022
Honor Our Military, Remember Our Veterans
In line with our Masonic values, our Masonic Villages have a rich history of honoring our military and veterans. The Veterans Grove in Elizabethtown and the Veterans Garden in Sewickley are special places that have only made possible because of donor support. Scan the QR codes on the images to watch a tour.
Please contact the Office of Mission Advancement and Development to purchase pavers in honor or memory of a loved one and support the maintenance of these beautiful areas with a meaningful gift.
The Veterans Grove in Elizabethtown
The Veterans Garden in Sewickley