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ABOUT ESTATE PLANNING - HOW CAN IT HELP YOU AND CBI?
By Jack Charney
In earlier issues of Tidings, we have discussed the importance of endowment to ensure the future of our Congregation and its programs. Estate planning is the process through which gifts for endowment and other purposes, including gifts to the family, are arranged and put into place.
The important issues are:
- who is to receive what assets
- when are there assets to be transferred
- how can the tax implications be mitigated?
There are many ways to make gifts, whether they are charitable or personal. Unless the gift is small, it is important to create a structure and environment that ensures the gift will fulfill the purposes for which it is made. This frequently means using trusts or other arrangements to carry out the gift.
There are three types of taxes that must be addressed in the estate planning process:
Income Taxes:
With proper estate planning and structuring, charitable contributions can create a deduction for the taxpayer. The government likes charitable giving and encourages people to donate by allowing them to deduct the value of such gifts from their income taxes.
Gift Taxes:
When gifts are made during lifetime to anyone, including charities, they can be subject to gift tax. It is extremely important to structure charitable gifts in such fashion as to qualify for the gift tax deduction.
Estate Tax:
After one works a lifetime accumulating assets to pass on to family or selected charities, careful planning must be done to maximize those transfers in a tax efficient way. Estate tax has been described as a "voluntary tax" because there are many strategies that can be employed to either negate the tax or to mitigate it significantly. The appropriate strategy will be determined by the individual circumstance, of course, and proposed gifts should be reviewed by your financial advisor.
Deciding which strategies work best in the context of the given circumstance and the applicable transfer tax, whether it be gift tax or estate tax, is what estate planning is all about. Planning for the proper structure, timing and implementation of gifts to family, friends and charity is an important process that, once undertaken, gives a great sense of satisfaction in taking care of the people and institutions we have dedicated our lives to nurturing and perpetuating. It is an undertaking we all should take seriously and discharge responsibly as a demonstration of the love we have for our families, our congregation, and the other people and institutions that have contributed to the fullness of our lives.
L'Shalom,
Jack Charney
If you are interested in a confidential appointment to explore ways in which you may wish to make an endowment gift, please contact Stuart Simmons, Executive Director, at 858-535-1111 ext. 3113.
Merle Brodie, a member of our congregation and our Endowment Committee, serves as Director of Philanthropy at the Jewish Community Foundation. If you are interested in learning more about tax saving strategies through charitable giving, please call Merle at 858-279-2740.
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