The Ultimate Planned Gift Story

20190114_222504You might be thinking that this story will be about one of the sweet old ladies leaving some huge, unexpected bequest to the synagogue or school that they loved so much.

Not this time but please read on to hear what I think is truly the ultimate planned giving story.

Millie Geldman, one of the two women sitting down in the picture, passed away a few months ago, and as the Rabbi was discussing her connection to the synagogue and the community, I was thinking planned giving story.  But, what I eventually learned was much more powerful that just another big bequest!

Millie grew up in the neighborhood and had been involved with the synagogue for her entire life (over 90 years I believe).  Such a sweet woman, always smiling and interacting with children, even though she had not been blessed with her own.  Everyone knew and appreciated her happy presence – a fixture in the synagogue for close to a century.

And, with her passion for children, it was not surprising that the local Jewish day school was perhaps her favorite local institution.  In fact, she was so passionate about the school that when they announced a building campaign about 15 years ago, Millie and her sister made a very significant gift towards their new building.  It was a beautiful story – Millie made her impact during her life and lived to see the fruits with her frequent visits to the school – she truly got “nachas” (pride) from seeing “her” children attend the school at their new location.

The story doesn’t end there.  She survived her sister, living well into her 90s and her only “family” were the children from the school and the families in the community.  But, as her health changed, she was less and less able to get around.  In fact, she reached a point of where she might have needed to go into a nursing home – not exactly a first choice for Millie – a very personable and vibrant woman.

Her wish was to somehow stay in her apartment but she couldn’t afford it along with the aide she needed. You see, she gave away a good part of her savings when she made that gift to help build the school.

Here is what I think is the greatest planned giving story.  The president of the day school, along with a group of friends in the community, made a commitment to raise the funds necessary to help Millie stay in her apartment.  They did this for several years – the “keep Millie in her apartment campaign.”  And, it worked. Home bound for the last 5+ years of her life, the community which she gave so much to and loved so much, took care of her and made sure she had the comforts that we’d want for ourselves and our loved ones.

Millie did a planned gift – she gave the bulk of her savings to make sure local children had a beautiful new school.  And, the community gave back, not just in monetary support but also visitors and other forms of support throughout the years.

Yes, this was a planned gift and the results were tremendous.




Think you know Charitable Lead Trusts?

lead trust pickLead Trusts are never simple – Read this carefully if you ever plan to talk to donors about lead trusts

Through an office contact, I was introduced to a “perfect” lead trust donor – a guy looking to get it done quickly, already vetted for this particular vehicle (or so he thought), all of the right factors.  As usual with “perfect” lead trust donors, I start with the basics to just see if this is really a candidate and check off the boxes to see if this is even an appropriate discussion topic for this donor:

Do you and your wife have over $20 million in assets to even be concerned with estate taxes?  Check.

Are you looking to pass assets in the future to your children? Check.

Do you have an immediate income tax need?  Check, he’s selling a business (cash sale) and getting hit with huge income taxes this year.

Charitable?  Check, has long-term ideas for giving.

So, we are talking about a Defective Grantor Lead Trust that will get both an upfront income tax deduction as well as future growth potential, and lots going to charity.

More questions:

What kind of investment for the Lead Trust itself do you have in mind?  Real estate type – LLC or LLP or REITs – good choices. Check.

What kind of payout to charity? 6% annuity over 20 years sounds good to him. Great. Check.

Last round of questions:

What charity do you have in mind?  Uh oh. Wants charitable annuity to flow to his private foundation.  It’s doable but there are some caveats.  1. IRS only allows if the grantor recuses himself from final decisions on grants of these particular funds – doable.  2. The tax deduction ceiling for any lead trust that allows any payments to any private foundation is limited to the 20% of AGI (read this point again if it is new to you as it was to me!).

Yes, this donor would be limited to 20% of his AGI in charitable income tax deductions per year for this gift.  Yikes. He was hoping to put $6 million in with a $5 million or so charitable deduction.  But, he would only get to deduct $ 1 million of that deduction this year!  He is facing over $10 million in ordinary income this year and was hoping to save much more on that end.  In any case, he suspects that he won’t have enough future income to use up all of those carryover deductions!

What if he directs all of the annuity payments to a public charity?  Does he get the 60% ceiling, which was hoping for?  Nope!  At best, he gets the 30% ceiling against his AGI! (Did you know that the income tax deduction for lead trusts is always treated as a “stock gift” for AGI ceiling purposes?  I didn’t and I teach courses on lead trusts!!!)

My last suggestion?  Look into an immediate gift to a donor advised fund for future giving and possibly half of his original intent into a lead trust.

Haven’t heard back from him.  Oh well.  This guy was as close to being a perfect defective grantor lead trust donor as you could find but the devil is in the details, as usual.


2018 Tax Reform Still a Mystery? Repeat of Tax Briefing for Fundraisers coming up!

Image result for confusion taxesStill wondering how the 2018 Tax Reform bill impacts you and/or your donors?

If you are interested in an overview of the significant changes impacting your top donors, and perhaps yourself, check out our repeat webinar presentation that is scheduled for December 10 at 12 NOON EST: 2018 TAX PLAN BRIEFING FOR DONORS AND NONPROFIT LEADERS

Over 300 people joined our webinars on this topic in January and February this year.  Lot’s of great feedback. Very practical. Designed for non-tax experts!  Cost: $75 for first location and $25 for additional locations.  Includes our draft donor friendly brochure text!


Planned Giving Boot Camp starts again October 10

Click this link Planned Giving Boot Camp to learn more about training your entire team in Planned Giving over six 1-hour webinar sessions over six week!  Or click here to register!BootCamp