As the Planned Giving World Turns – Roth IRAs and Bankruptcy Protection

I can’t believe it has been almost a month since my last post!  It’s been the busy season for me!

Anyway, I have 2 updates for readers.

1. My previous post in March had to do with my amazing discovery (at least to me)  about how bankruptcy courts generally protect endowments and other restricted gifts from creditors!  To back up this claim, I finally got around to reading my emails and there was an article from a top law firm discussing this very topic on http://onphilanthropy.com/.  Here is the link:

http://onphilanthropy.com/2010/charities-in-distress-governance-and-standards-of-care-in-troubled-times/

2. Roth IRA rules.  Check out on the web the HUGE change in the 2010 IRA Roth conversion rules.  In short, 2009 and prior, wealthy individuals and higher net earners ($100,000 AGI and up) were essentially locked out of the Roth IRA world.  Comes 2010, and all of those who actually have assets can now convert their entire IRAs into Roths!  And, not even pay the income tax in 2010 (can be spread out 50/50 in 2011 and 2012).  And, they can retroactively back out of it before ever paying taxes if the investments tank!

Why should fundraisers know about or care about Roth IRAs (in fact, they are the last asset that should be designated to charity!)?

Well, if you find out that your major campaign supporter is going to take advantage of the new law and get socked with huge tax hits in 2011 and 2012, why not work with the donor on accelerating his pledge?  Just one example.

More to come about Roths.

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