All Posts in "Amy Lewis"

woman signing a checkMany people put off making gifts until the end of the year.  If you want to make a charitable gift and be able to deduct the gift in 2011, timing is critical.

The requirements for making a year-end charitable gift by check or credit card effective for the current calendar year are relatively simple.  A gift by check will be effective for 2011, if you sign the check and place it in the mail or deliver it to the charity by Dec. 31.  As long as the check is paid in ordinary course, the gift is effective as of the date of mailing or delivery even if not actually cashed until the following January.

Similarly with a credit card, the gift is effective when the charge is made on the card owner’s account.  Because credit card charges are normally created immediately by electronic debit, it should be possible to make a gift by credit card as late as Dec. 31.  Credit card charges at year-end are deductible even though you will not receive the bill and make the payment until the following year.

In many cases it is also possible to make gifts of stock late in the year.  The best option if you hold stocks in a brokerage account is to have the charity create an account with the same brokerage firm.  In that case, the transfer can be made immediately from your account to the charity’s account.  If you hold stock certificates, it is possible to endorse the certificates and deliver them to a local charity in person.  If the charity is not local, you can send the stock certificates in one envelope and a form called a “stock power” in a separate envelope.  As long as both envelopes are postmarked before the end of the year, the gift will be effective.

It is also possible to transfer real estate to charity late in the year, but in most cases you will need to allow sufficient time for an attorney to draft the deed and for the charity to complete its acceptance process.  Once signed and notarized, the deed can be delivered to the charity prior to the end of the year to make the gift effective.
If your gift will be in the form of a charitable gift annuity or charitable trust instead of an outright gift, you will need to allow more time for the appropriate documents to be drafted.  It may be possible to implement a charitable gift annuity during the last week of December, but a charitable trust would almost certainly need to be started before Christmas.

If you want to make a charitable gift, but have not yet decided on a charity, consider a gift to a donor advised fund.  This allows you to receive the deduction for 2011, but select your charitable recipient in 2012.

Amy Lewis is an attorney with Eisenhower, Carlson, PLLC, in Tacoma. She specializes in charitable gift planning, estate and tax planning. Please consult a qualified estate planner before making a charitable gift.

Amy Lewis by — December 21, 2011 in Everything Else

Many people wonder how to plan for their estate if they have concerns about the ability of a beneficiary to handle a bequest.  They want to know what options they have and how a charity might be involved in the solution, if at all.

Usually the best option for a beneficiary who might not be capable of handling a lump sum gift is to create a trust for the beneficiary.  In a trust, you can name a trustee to handle the financial management and make distributions to or for the benefit of the beneficiary.  Trusts can be very flexible, so you can structure the distribution provisions to fit the needs of your beneficiary.

The trustee can be a family member, a friend or a professional.  Often, however, family members are not the best choice because distribution decisions may place stress on family relationships.  Under the best of circumstances it can be awkward to manage funds for another family member.  If you are dealing with a beneficiary who is financially irresponsible, the situation can be much worse because the beneficiary may put pressure on the trustee to increase distributions.  For similar reasons it may be difficult for a friend to serve as trustee.  Banks and trust companies are a good option because they are experienced in working with difficult, inexperienced or irresponsible beneficiaries.

If you like the idea of providing a beneficiary with a regular income stream for the beneficiary’s lifetime and you would also like to support a charitable organization, then there are two options that allow you to meet both of these goals.  These options are charitable remainder trusts and charitable gift annuities.  Both of these options provide a stream of income to an individual beneficiary.  Upon the death of the beneficiary, the funds remaining in the trust or annuity belong to the charity.

Many charitable organizations offer charitable gift annuities administered by the charitable organization.  These are simple to set up and can be funded with relatively small dollar amounts.  Although it is a good idea to consult your attorney, accountant or other financial advisor, you do not need the services of an attorney to create a charitable gift annuity.  Charitable remainder trusts do require an attorney to draft the trust document.  A charitable organization can often serve as the trustee if the organization is designated to receive all or a significant portion of the remainder following the death of the beneficiary.

Trusts offer an effective solution if you have concerns regarding a beneficiary’s ability to handle a gift or inheritance.  If you want to combine planning for your beneficiary with a charitable gift, then a charitable gift annuity or a charitable remainder trust might be the best option for you.

 

Amy Lewis is an attorney with Eisenhower, Carlson, PLLC, in Tacoma. She specializes in charitable gift planning, estate and tax planning.  Please consult a qualified attorney or estate planner before making a gift in your estate.

Amy Lewis by — July 28, 2011 in Everything Else