Information on Tax and Estate Planning from the Masonic Charities of the Grand Lodge of Pennsylvania
I suggested they get started with preparing a new estate plan by using a good estate planning worksheet, such as the Masonic Charities Estate Planning Guide, which can be
downloaded from our website at MasonicCharitiesLegacy.org or by calling our office for a hard copy. I warned them that completing the guide requires some unpleasant work, like preparing for a colonoscopy, but once it is finished, you will be happy you did it. For many, unfortunately, the guide sits on the kitchen table and eventually is discarded in the recycle bin. This is not a good result, since we all must deal with our mortality someday. To stay focused, Bob and Jean agreed to complete the guide within 30 days and then meet me at the Masonic Village at Dallas clubhouse to review the document. I also suggested they send me a copy of their completed document, and we could discuss it over the phone or via a Zoom meeting, but they wanted to see me wear my new Eagles mask. Once we reviewed their asset list and discussed who they wanted to receive assets when both passed, I made several suggestions on how they might want to designate such assets to loved ones and their favorite charities.
Asset Planning Primer Many of you have been diligent readers of The Blitz for many years, and by now could pass the estate and trust section of the Bar Exam. However, for our new readers and even you die-hards, it’s helpful to go through a primer session on how best to do your estate plan. Even I have to take continuing education courses to refresh myself on this topic. So, let’s go through a short scenario together. Recently, I got a call from Brother Bob and his wife, Jean, from Scranton, about preparing their estate plan. They said their current Wills were done years ago and needed to be updated.
Our conversation centered around how to minimize taxes and determine what was the appropriate amount each loved one and charity should receive and how best to receive it (i.e. outright, lifetime payments or both). I reminded them that not all assets are alike and it was critical they properly designate the right assets to the right beneficiaries, or the plan would be defective. I recommended some attorneys from our Masonic Charities attorney list who would be able to complete the documents for their estate plan. With the completed document and suggestions in hand, they met with counsel and had everything in order within another 30 days. A happy ending!
So, make yourself a New Year’s resolution to update your estate plan by getting our Estate Planning Guide and completing it by a certain date in 2022. Feel free to reach out to me, or any of the capable gift planners in our office, for a review and suggestions for your plan, along with attorney recommendations.
Update from Erie, PA, Reception On Oct. 6, 2021, we conducted our first Masonic Charities reception in Erie, PA, hosted by Brothers Kim Jeffries, P.D.D.G.M., and Jeff Wonderling, R.W. Deputy Grand Master. It was a great opportunity to spend some time with members in this area and to present a 60-Year Service Award to Brother William Kay.
Update on End-Of-Life Comfort Care Project at Masonic Village at Elizabethtown I am happy to report the challenge to fund the renovations for a new dedicated wing for end-of-life comfort care in the Masonic Health Care Center at the Masonic Village at Elizabethtown have exceeded expectations. The original $150,000 gift toward the project by Brother Tom Shott, of Palmyra, was matched by Elizabethtown residents Brother James and Virginia McCall. As of November 1, we also received more than $32,000 from other donors with additional commitments to be received before the end of the year. Construction on the project will begin in January, with a projected completion and dedication in spring 2022.
Thank you to everyone who contributed to make this project a reality!
Neither Masonic Charities of the Grand Lodge of Pennsylvania, nor Alvin H. Blitz, Esq., provide legal, financial or tax advice. None of the information in The Blitz should be deemed legal, financial or tax advice or acted upon by any person without prior consultation with appropriate professional advisors.
Let’s Review Rules for Gifting While Alive Lifetime gifts should always be considered as part of your estate plan. Let’s review some basic rules when making gifts since the holiday season of giving is upon us. 1
ANNUAL EXCLUSION: Everyone gets to give up to $15,000 per person per year to anyone, without incurring any gift tax liability. If your total amount of gifts to anyone exceeds that magic number, you usually do not pay a gift tax, but must file a gift tax return reducing your lifetime exemption (currently $11.7 million) by the amount in excess of the $15,000. Failure to file the return in a timely manner could result in penalties and interest being imposed, even if no tax is due.
GIFTS BY PENNSYLVANIA RESIDENTS: Any gifts exceeding $3,000 in value made within one year of the date of death of a PA resident are subject to the PA inheritance tax (called the anticipation of death rule). You really can’t escape death and taxes in PA.
MEDICAID LOOKBACK RULES: Gifts made in excess of $500 per month within five years of applying for Medicaid can disqualify you for Medicaid coverage for a period of time, or it could be in violation of the resident agreement if you are residing at a continuing care retirement community, including the Masonic Villages. (Make sure you see an elder law professional before making large gifts that may trigger this rule.)
CONSIDER AVOIDING GIFTS OF HIGHLY APPRECIATED ASSETS: Gifts of highly appreciated capital assets may not be wise later in life or in anticipation of death. This is because the person receiving the gift gets the basis in the asset that you had, while a gift at death of such assets gets a step-up in basis to the date of death value and avoids the capital gains tax. (See a financial planning professional before making such gifts.)
MAKING CHARITABLE GIFTS: For 2021, here are the best charitable gift tips: (1) Use the $300 per person or $600 per couple non-itemizer deduction for this year if you don’t itemize. (2) Make gifts from your traditional IRA to charity if you are over age 70½ (the famous qualified charitable contribution or QCD). (3) For large cash donors, this is the year when you can get a 100% deduction against any CASH gift to charity. (This is a great way to give an IRA to charity if you are over age 59½ and cannot use the QCD).
Please note, this is a general list of ways to make gifts and is not exhaustive. The list is also not applicable to all individuals. Please see a tax professional before proceeding with any major gift to charity or an individual. Feel free to contact me with any questions regarding these tips, and HAPPY GIVING!
1-800-599-6454 | MasonicCharitiesPa.org
Masonic Charities One Masonic Drive Elizabethtown, PA 17022
Join Me for Lunch Please see the dates below where I will be holding upcoming luncheons. To RSVP, call 1-800-599-6454 or email ABlitz@masonicvillages.org.
Fort Myers/Englewood, FL Nov. 29 – Dec. 4 Jan. 25 – 28 Phoenix, AZ Feb. 8 – 11 Tampa, FL Brother Alvin H. Blitz, Esq., Carlisle Lodge No. 260, serves the Masonic Charities of the R.W. Grand Lodge of Pennsylvania, which consists of the Masonic Villages, the Masonic Children's Home, the Pennsylvania Masonic Youth Foundation, The Masonic Library and Museum of Pennsylvania and the Grand Lodge of Pennsylvania Charity Foundation.