Planned Giving To Preserve Our Masonic Home

Planned giving refers to several gift techniques that typically involve your retaining a portion of, or an interest in, the asset that you are giving to charity. Some people consider charitable distributions under a will or trust, life insurance and retirement plan beneficiary designations, and other direct, but deferred, gift arrangements as also being planned gifts. Direct contributions to local or national charities may be considered, but do not usually provide any future ability in the donor or his or her family to assist in the charitable direction. A charitable remainder trust is an exception.

Planned gifts can provide you with many benefits. These benefits can include an immediate charitable income tax deduction (even though the charity may not receive any property until some future date), avoidance or deferral of capital gains taxes on appreciated property used to fund the gift, retained and possible increased income for yourself or others you may care about, possible assistance in asset diversification and last but not least, support for your Masonic Home.

Planned Giving Through Retirement Plans

Attracted to the tax-deductible contributions, many individuals have amassed significant wealth in their pension plans and individual retirement accounts. Income tax-deferred retirement accounts allow assets to grow on a tax-deferred basis; however the participant incurs ordinary income taxation on withdrawals. Roth IRAs are an exception.

If, after death, the retirement account benefits are paid to anyone but the account owner’s spouse, those benefits may be subject to estate taxation as well (If the owner’s estate is above a certain value). While there is an income tax deduction for estate taxes on the withdrawals, the combination of the two taxes is substantial. If, however, you leave tax-deferred retirement accounts to a charitable organization at death, they can transfer these assets without incurring any taxation.

One simple way to implement your philanthropic wishes is for you to name the Masonic Home Endowment Fund, Inc., a beneficiary of your retirement plan. Retirement assets can be gifted easily to the endowment fund at death. This can be done by designating the Masonic Home Endowment Fund, Inc., as the beneficiary for the retirement asset. Tax savings can be significant. The spouse must waive designation in writing on defined benefit plans. For example, if you were to give a $100,000 IRA to y our children at death and another $100,000 of assets to the Masonic Home Endowment Fund, Inc., the children would have to pay income taxes on the IRA (in addition to any estate taxes that might be owed). By giving the IRA to the Masonic Home Endowment Funds, Inc., and the other assets to the children, all of the income taxes are avoided on the IRA. The income tax benefit can be important when planning the distribution of your pension, profit sharing, Section 401(k) and Section 403(b) plans and IRAs. Individuals can use assets held in an individual retirement account (IRA), 401(k), 403(b) or similar account to start a fund at the Masonic Home Endowment Fund, Inc., at the time of their death.

There are a number of different planned gift options, each of which is useful in certain circumstances. The goal is to find the planned gift that is most advantageous to yourself, to your family, and to the Masonic Home. The foregoing is an excerpt reprinted from an article by Brother Bruce Marger, Esq., a member of the Panel of Attorneys. The article may be found in its entirety in the Summer, 2008 edition of Action Line, a publication of the Florida Bar Real Property, Probate and Trust Law Section, which has given reprinting permission. Brother Marger May be contacted a BMarger@trenam.com or (727) 824-6144.

Stephen Gladstone
Legal Advisor