Planned Giving

News and Information

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September, 2017

"When you open your heart to giving, angels fly to your door."


IRS Issues Urgent Warning to Beware IRS FBI Themed Ransomware Scam
The Internal Revenue Service today warned people to avoid a new phishing scheme that impersonates the IRS and the FBI as part of a ransomware scam to take computer data hostage.
The scam email uses the emblems of both the IRS and the Federal Bureau of Investigation. It tries to entice users to select a “here” link to download a fake FBI questionnaire. Instead, the link downloads a certain type of malware called ransomware that prevents users from accessing data stored on their device unless they pay money to the scammers. Read more.

Wise giving in the wake of Hurricane Harvey
It’s heartbreaking to see people lose their lives, homes, and businesses to the ongoing flooding in Texas. But it’s despicable when scammers exploit such tragedies to appeal to your sense of generosity.
If you’re looking for a way to give, the FTC urges you to be cautious of potential charity scams. Do some research to ensure that your donation will go to a reputable organization that will use the money as promised.
Consider these tips when asked to give: Read more.

HSAs: Spend or Save It?
HSAs are available to workers who have high-deductible health insurance plans (HDHPs). The accounts can be used to meet deductible and other out-of-pocket health care costs. This year, plans can have a maximum out-of-pocket cost of $6,550 for individuals and $13,100 for families. Last year, 26 percent of employers helped offset those costs with contributions to the accounts averaging $868, according to Devenir, a consulting firm that works with HSA providers and employers. Workers also can make pretax contributions—this year, up to a combined total of $3,400 for individuals and $6,750 for workers with family insurance coverage.
HSA contributions are tax deductible, investment growth and interest are tax deferred, and withdrawals spent on qualified medical expenses also are tax free. The triple tax benefit increases buying power, especially when compared with the benefit of drawing down from a 401(k), which is subject to ordinary income tax on contributions and investment gains. Benway calculates that a worker earning $60,000 would need to save 25 percent less to meet medical expenses by splitting annual contributions to a 401(k) and HSA. Read more.

Make Your Retirement Money Last For Life
If you’re nearing retirement, consider a new option designed to prevent you from going broke in your old age. You can invest up to 25% of the total balance of your IRAs and 401(k)s, or a maximum of $125,000, (whichever is less) into something called a qualified longevity annuity contract or QLAC.
A QLAC works like this: you pay an insurance company a lump sum, and the company pays you an annual income for life, beginning sometime in the future---anytime between when you turn 70 ½ and 85. The longer you wait for your payout, the bigger the annual payment will be. Read more.

Is It Wise to Trade Your Pension for a Lump Sum?
Most private employers have already replaced traditional pensions, which promise lifetime income payments in retirement, with defined contribution plans such as 401(k)s. But 15% of private-sector workers and 75% of state and local government workers still participate in traditional pensions. Altogether, 35% of workers say they (and/or their spouse) have pension benefits with a current or former employer.
Many pension plan participants have the option to take their money in a lump sum when they retire. And since 2012, an increasing number of large corporate pensions have been implementing "lump-sum windows" during which vested former employees have a limited amount of time (typically 30 to 90 days) to accept or decline buyout offers. (Lump-sum offers to retirees already receiving pension benefits are no longer allowed.) Read more.

How to use Crummy Trust to Avoid Gift Taxes
Wealthier Americans face a challenge: how to transfer money to future generations while paying as little as possible in taxes to Uncle Sam. The reason that's difficult is that the estate tax imposes a 40% tax on transfers at death above the lifetime exemption amount, while the gift tax imposes a similar tax on transfer made during one's lifetime.

Moreover, many people are reluctant to give outright gifts to children and grandchildren for fear that the recipients will squander the gift. However, by using what's known as Crummey trust provisions, you can make gifts that qualify for the annual gift tax exclusion while retaining control over how the trust money is invested and eventually distributed to your loved ones. Read more.

How To Find Your Own Retirement Tax Haven
Thinking of leaving a high-tax state for a low-tax state in retirement? You need to know that states differ dramatically on tax: whether to exploit millionaires, shower breaks on retirees, go after non-residents and even the dead. They even differ on whether to tax Social Security benefits; just 13 states do. If you’re a pre-retiree planning out how taxes will impact your retirement, keep in mind that it makes a big difference what your total income is, and what kind of income you’re receiving. And don’t plan too far ahead. “Nothing in taxes is ever permanent; legislators are always changing the tax law,” warns James Wetzler, former New York state commissioner of taxation, who concluded in a recent review of state migration studies that there is little evidence to discourage an extension of the New York’s millionaire’s tax. Read more.

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