By Jillian Huang – Featured in the Idaho Women’s Charitable Foundation Newsletter – February, 2016
We enjoyed our first Education program of the year on January 12, 2016. Inspired Philanthropy featured two speakers who are also IWCF members: Laura Simic, Vice President for Advancement at Boise State University, and Susan Graham, a Certified Elder Law Attorney. The program was held from 11:30 a.m. to l p.m. at the Esther Simplot Performing Arts Academy and 23 people attended.
Simic defined philanthropy as voluntary action for the public good, an expression of values, and a belief that everyone has a role to play in improving our collective condition and making the world a better place. She explained that creating a thoughtful giving plan allows you to express yourself, your passions, and your goals and reasons for living, but most importantly, it has transformative powers for both the giver and receiver. In short, giving makes us feel good!
How do we get started with our giving plan? Begin by thinking about your values, Simic suggested, and by answering questions such as:
- What experiences and people have been key in shaping your core values and passions?
- What keeps you up at night?
- When you hear of world events or witness an injustice, what moves you most?
- What brings you joy?
Simic said answering such questions is the visioning stage of planned giving. It helps you focus on what problem in society you would really like to help resolve. She shared a favorite quote from Si Seymour: “Giving is prompted emotionally, and then rationalized. The heart has to prompt the mind to go where logic points the way.” Careful visioning will help eliminate the barriers to effective giving, which include lack of information, lack of confidence that you can really help, and lack of time and focus to do all the research. Simic suggested that once you decide on a recipient, contact them to see what they really need and if you are a good match. Working closely with them will result in the best possible use of your gift. She reminded us that giving and estate planning are ongoing processes, not a one-time event!
Graham covered the technical details of giving plans as they relate to attorneys and the law. With great humor, she led the group through a series of steps to take once they decide to whom they will leave a gift. When people write their will, she said, they specify that the recipient will receive either a specific dollar amount or a de’fined percentage of the total value of their estate. Graham cautioned that the percentage gift can sometimes result in a lower gift overall, due to the amount of time it takes to settle an estate and the expenses to manage the process. She pointed out that being very specific about your beneficiary is crucial. For instance, if you designate the Red Cross to receive your money, you must also specify an Idaho office if you want the gift to remain in your community. Otherwise, your gift might go to the national office.
Graham also covered the benefits of leaving retirement (IRA) funds to a charity rather than to a person: The charity, unlike a person, does not have to pay taxes on the gift. She pointed out that mixing charities and persons equally in a gift complicates matters and almost always guarantees less rnoney to go around for everyone. She said that real property gifts can be great as long as they are something of use to the receiver and not an additional financial liability (think large plot of land without an access road, or with a polluting gas station on it!). Graham covered the use of private foundations, private operating foundations, and donor-advised funds-how their tax benefits vary and how they differ in terms of how much control you have over the distribution of your funds. Donor-advised funds allow you to take the entire donation as a tax exemption. She reminded us that the current death tax laws allow an individual to leave an estate of slightly over $5 million before any taxes are required of the heirs. With that in mind, she reminded us that if we own a home, and/or have a retirement account or other accounts, we indeed have an estate, and we could start planning for it now.
******************** UPCOMING SEMINAR ********************
Free public seminar – Thursday, April 7, 2016 at 10:00 a.m. and 2:00 p.m.
Join us for this informative seminar, sponsored by Susan M. Graham, to help you understand ways to create your Estate Plan and at the same time increase your retirement security – bring a friend or two!
For more information and to register, Click Here or call 344-0375.