The following is a reprint of the JCF's Money Matters column, published in the August 7, 2024 issue of the Jewish Community Voice, titled, "JCF can help you reach your philanthropic goals":
Are you working with an estate attorney to create or update a will or estate plan? Will you be meeting with a financial advisor to review your investment portfolio? Do you consult with an accountant to discuss your tax landscape?
If you answered “yes” to any of these questions, please consider discussing your philanthropy with these knowledgeable professional advisors as well.
While the JCF does not provide estate, financial, or tax advice, many advisors are well-suited to having these discussions and will be happy to help you reach your philanthropic goals. Here are six questions to consider asking your advisors about philanthropy:
• With August known as “Make a Will Month,” a timely question is “How much money can I comfortably leave as a legacy gift (bequest) in my will or estate plan?” Many donors who leave a legacy gift carve out a percentage rather than a fixed dollar amount, since the future value of your estate or your financial needs is unpredictable. For example, a couple with two children could leave 45% of the estate to each (90% total), and the 10% balance could be designated for a legacy gift.
• “How much should I leave as a legacy gift via my IRA or life insurance policy?” Similar to leaving a percentage of one’s estate plan to charity, donors can update their beneficiary designation forms to ensure that a portion of these accounts provide a lasting legacy. Bonus: Modifying your beneficiary designation forms costs nothing.
• “Which appreciated assets should I donate to charity?” Donating assets such as stocks or bonds that have increased in value is one of the best ways to support the community while saving on taxes. By doing so, a donor avoids paying capital gains taxes while also earning a charitable tax deduction on the fair market value of the asset. Note: Appreciated assets must have been held for over one year and be donated directly to a public charity to qualify for maximum tax benefits.
• “How can I benefit by giving from my individual retirement account (IRA)?” For donors aged 70 1/2 years young or up who maintain an IRA, up to $100,000 in qualified charitable distributions (a.k.a QCDs or IRA charitable rollovers) can be transferred directly from an IRA to charity and will not qualify as income, thus avoiding income taxes on the IRA distribution. Further, a donor’s QCD can count towards one’s required minimum distribution (RMD) starting at age 73.
• “Should I consider bunching multiple years of donations to gain tax benefits for the current year?” The standard tax deduction is $14,600 for single filers, $21,900 for heads of household, or $29,200 for joint filers. By bunching donations to exceed the standard deduction, you can earn additional tax benefits. Plus, if you contribute your bunched donations into a donor advised fund (DAF) with the JCF, you can “park” your charitable gifts and then recommend DAF grants to charities of your choice at any future time.
• “Would I be a candidate to utilize an income-producing planned gift, such as a charitable remainder trust (CRT)?” With a CRT, the donor can earn tax benefits plus an annual income stream for oneself or to benefit other loved ones for a designated period (such as for the lives of the donors, or up to 20 years). The charity receives the remainder of the donated assets.
To discuss how the Jewish Community Foundation, Inc. can help you with establishing a DAF for your annual giving and/or an endowment fund for creating a legacy, please contact David Snyder today at (856) 673-2571.
Special thanks to JCF Board member Jocelyn Borowsky, Esq. for her assistance on this column.
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