Legacies A publication of the United Methodist Foundation of Louisiana
Inside This Issue
Getting Creative with Year-End Giving Page 2
How to Manage an Inherited IRA from a Parent Page 3
ENDOWMENTS:
Ministry in Perpetuity
Dr. Charles and Margo Morgan’s commitment to St. Paul’s United Methodist Church in Monroe started 33 years ago when visiting churches to find a church home. They had just moved back to Monroe to start Charles’ medical practice, and after their St. Paul’s visit, they knew it was “the one.” The Morgans have built a wonderful life around their church. Charles’ mother was a member of St. Paul’s during her later years in life, and their two daughters were raised in the church. They value the relationships they have created; all of their best friends are from their St. Paul’s family. Their love of music got them started in the choir early on, where they still sing most Sundays, and they have served on the Staff-Pastor Parish Relations Committee, as adult youth leaders, on missions to Mexico, in the Open Hearts Sunday School class and much more. Their children enjoy many memories of Confirmation, ski trips, the Christmas tableau and countless other church activities. So it only seems appropriate that this family would consult their pastor about a gift to the church, after receiving a family inheritance.
Meet Chris Spencer Page 4
“Where Faith and Money Come Together”
4th Quarter 2021
Their pastor, Rev. R.B. Moore, knew the value of endowments from his experience at a previous church appointment, and suggested to the Morgans that they contact the Foundation about establishing one for the benefit of St. Paul’s. As a result, the Chuck and Kay Morgan Memorial Endowment Fund was created with the inheritance from Charles’ mother, Kay, who passed away in June.
Dr. Charles and Margo Morgan
“We had to settle her estate and Margo and I felt we needed to give anything that was part of that to the church. Since those assets came from my parents and they were instrumental in my upbringing, we felt that was appropriate,” said Charles. As the endowment fund grows, the earnings are used to make annual contributions to St. Paul’s for ministry, in perpetuity. Dr. Morgan is an internist in Monroe and plays the double bass, and sometimes the piano, in the Monroe Symphony. He also plays keyboard in a local band, “Code Blue and the Flatliners,” a group made up of medical doctors. Margo is a talented seamstress and enjoys two weekly Bible study groups. Together, they love traveling and visiting their daughters and three granddaughters. “This gift really springs from our commitment to tithing and our love for St. Paul’s. We have so many memories and three generations of our family that have loved the church. It is important to us that it thrives beyond our years,” Dr. Morgan explained.
Legacies
Getting Creative
“Where Faith and Money Come Together”
2021 Board of Trustees Omer Davis Chairman Rev. Weldon Bares L. Nettles Brown Dr. Debra Davis Rev. Doug deGraffenried Mike DeHart Bobby Fahey Irwin Felps Dean Harvey Rev. Michi Head Jarvis Jones Drew Kennedy Sandra Kuykendall Eunice Val Lavigne Richard Lewis Rev. Ashley McGuire Rev. Brian Mercer Troy Searles Rev. Drew Sutton Dianne Wilkinson Chris Spencer President
Contact Us: 8337 Jefferson Hwy. Baton Rouge, LA 70809 Phone: (225) 346-1535 Email: information@umf.org Web Addresses: www.umf.org www.umfgiving.org Legacies Editor: Kelly Johannessen kellyj@umf.org
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WITH END OF YEAR GIVING If you are interested in making a yearend gift, and you are cash-strapped, there are other alternatives worth considering to reach your goal. Look at these options for your end-ofyear giving:
Gift of Stock or Property
If you want to make a quick and easy gift that offers an immediate charitable deduction, think about a gift of appreciated stock or property. Benefits of this gift strategy include: •
Eliminating capital gains tax that would be due if you sold it, and
•
Getting your generous contribution straight to work making an impact on ministry.
IRA Charitable Rollover
If you’re 70.5 or older, you are eligible to give a max of $100,000 per year from your IRA to benefit a qualified charity, such as your church. If you’re 72 years of age or older, the gift may count toward your RMD (required minimum distribution) for the year, and will not impact your taxable income.
Charitable Gift Annuity
This gift option is a win-win deal, because it benefits the donor as well as the church or ministry. With Charitable Gift Annuities, donors make a gift of cash, property or other asset and in return the United Methodist Foundation of Louisiana agrees to pay them a fixed amount every year for their lifetime. Also, donors will: • Receive an immediate charitable income tax deduction, and • A portion of the payments will be tax free for a period of time.
Life Insurance Policy
Did you know you can use an old or unused life insurance policy to support ministry? There are several benefits to this type of gift, including: •
Receive a tax deduction this year,
•
Make annual gifts to help us pay the premiums to maintain the policy, and receive an income tax deduction for each of your gifts, and
•
Exchange your insurance for a life-income gift that provides annual payments. Your church will benefit from the funds that remain.
If these year-end giving ideas interest you, please contact us. We would be delighted to talk with you and answer questions that you have regarding how to convert unused assets into something meaningful, while providing tax benefits at the same time.
4th Quarter 2021
Savvy Living
How to Manage an Inherited IRA from a Parent Dear Savvy Living, What are the rules regarding inheriting IRAs? When my mom died this year, I inherited her traditional IRA and would like to know what I need to do to execute it properly. Inheriting a traditional IRA from a parent has a unique set of rules you need to know which will help you make the most of the money you inherit and avoid a tax-time surprise. Here are some basics.
Set Up an Inherited Account
Many people think they can roll an inherited IRA into their own IRA. But if you inherit an IRA from a parent, aunt, uncle, sibling or friend you cannot roll the account into your own IRA or treat the IRA as your own. Instead, you will have to transfer your portion of the assets into a new IRA set up, formally named as an inherited IRA. For example, it could be titled [name of deceased owner] for the benefit of [your name]. If your mom’s IRA has multiple beneficiaries, it can be split into separate accounts for each beneficiary. Splitting an account allows each beneficiary to treat their own inherited portion as if they were the sole beneficiary. You can set up an inherited IRA with many bank and brokerage firms. However, the easiest option may be to open your inherited IRA with the firm that held your mom’s account.
10-Year Withdrawal Rule
Due to the SECURE Act, which was signed into law in December 2019, many non-spouse (but not all) IRA beneficiaries must deplete an inherited IRA within 10 years of the account owner’s death. This applies to inherited IRAs if the owner passed away after Dec. 31, 2019. There is no limit on when or how often you withdraw money from the account, as long as the account is empty by the end of the 10 years. This means you can choose to withdraw all of the money at once, you can leave it sitting there for a decade and then take it all out, or you can take distributions over time. Be aware that just as with a non-inherited traditional IRA, each withdrawal will be counted as income and subject to taxes in the year you make the withdrawal.
Exceptions to the Rule
There are several exceptions to the IRA 10-year rule, including for a surviving spouse, minor child, disabled or chronically ill beneficiary or a beneficiary who is no more than 10 years younger than the original IRA owner. These beneficiaries may have more time to draw down the account and pay the resulting tax bill.
For example, when you inherit an IRA from a spouse, you can rollover the IRA balance into your own account and delay distributions until after you turn age 72. Minor children do not become subject to the 10-year rule until they reach the “age of majority,” which is age 18 in most states. Disabled and chronically ill beneficiaries, and individuals no more than 10 years younger than the original account owner have the option to stretch required withdrawals over their lifetime.
Minimize Your Taxes
It’s tempting to cash out an inherited IRA in a lump-sum withdrawal, but tread carefully. This could leave you owing a hefty sum when it is time to file your taxes. Withdrawals from a traditional IRA are generally taxable as income, at your income tax rate. It could be a smart tax move to gradually draw down the account over the 10-year period to avoid a large tax bill in a single year and potentially being bumped into a high tax bracket. If you are approaching retirement, you may want to wait to start withdrawing from the account until you are retired and your income drops, potentially putting you into a lower tax bracket.
“Savvy Living” is written by Jim Miller, a regular contributor to the NBC Today Show and author of The Savvy Living book.
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Meet Chris Spencer, Foundation President There’s new leadership at the Foundation these days! The Foundation’s Executive Committee named Chris Spencer President and CEO of the organization, effective July 1.
“I am honored and humbled by the opportunity to serve the Foundation as its next president/ CEO. It is exciting to be leading such an important ministry, and I look forward to working in this capacity.”
Chris served as the Foundation’s development officer for south Louisiana since 2017. Prior to joining the Foundation, he served as a commercial banker, private banker and regional communications manager in a 24-year career with JPMorgan Chase in Baton Rouge and Dallas.
Chris earned a B.A. from the University of North Carolina at Chapel Hill and an MBA from the Executive MBA Program at LSU. A native of Charlotte, N.C., Chris and his family have lived in Baton Rouge since 1998. They are active members of First United Methodist Church of Baton Rouge and Chris has previously served
Chris Spencer
as Board Chair of the YMCA of the Capital Area, and on the boards of Friends of Louisiana Public Broadcasting, Prevent Child Abuse Louisiana, LSU Laboratory School and the Baton Rouge Soccer Club.
“We are very fortunate to have someone with both the experience and heart for the church that Chris has to assume the presidency. The future of the Foundation is very promising,” said Foundation Board of Directors Chair Omer Davis. Chris’ wife, Karen, is an administrator with Parkview Baptist School of Baton Rouge. Their daughter, Caroline, is a law student at American University in Washington, D.C., and their son, William, is a sophomore at the LSU Laboratory School in Baton Rouge.