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When you stop giving and offering something to the rest of the world, it's time to turn out the lights. George Burns
Above graphs from CNN Money	Monthly Features Recent Economic News Seven Economic Indicators Major Index Twelve Month Charts Mid Month and Recent Updates Update - CRT Spousal Waiver Monthly Magazine Give More and Live More Be Careful of Trusting 'Trust Mills' High Telemarketing Costs Limit Donations Tax Exclusions, Limits and Credits for 2006 News Sources Past Issue Archive

Recent Economic News

Economy Speeds Up - 2/28/06 MarketWatch
The U.S. economy grew at a 1.6% annual pace in the fourth quarter, a bit faster than previously thought, while core inflation was a touch lower, the Commerce Department said Tuesday. In its second estimate of real seasonally adjusted gross domestic product, the government said inventory rebuilding accounted for all of the growth in the economy during the quarter.

Comsumer Confidence Reverses Gains - 2/28/06 MarketWatch
U.S. consumer confidence ended a three-month winning streak in February, falling to 101.7 from a revised January level of 106.8, the Conference Board said Tuesday. Economists surveyed by MarketWatch were expecting consumer confidence to fall to 103.9 after hitting a previously estimated 106.3 in January. Conference Board consumer research director Lynn Franco said the full report could suggest a worsening outlook for 2006.

Orders for Durable Goods Tumble in January - 2/24/06 NYTimes
Orders to U.S. factories for big-ticket manufactured goods fell by the largest amount in 5 1/2 years in January as demand for commercial aircraft suffered the biggest setback in seven years, the government reported Friday. The Commerce Department said that orders for durable goods, everything from computers to cars, fell by 10.2 percent last month, a much bigger decline than had been expected.

January's CPI up 0.7% on higher energy - 2/22/06 MarketWatch
U.S. consumer prices increased a larger-than-expected 0.7% in January, led by higher energy, food and housing costs, the Labor Department said Wednesday. The core consumer price index - which excludes food and energy prices - increased 0.2%, as expected. The increases in the seasonally adjusted CPI should keep the Federal Reserve on course to raise its overnight interest rate target to 4.75% in late March. Economists surveyed by MarketWatch had expected the CPI to rise 0.5% in January. After two months of declines, energy prices rose 5% in January. Food prices rose 0.5%. Housing prices increased 0.5%.

U.S. leading indicators for January rise 1.1% - 2/21/06 Reuters
The 1.1 percent gain in the index of leading economic indicators marked the fourth straight monthly rise, the private New York-based research firm said. It trounced financial market expectations of a 0.6 percent climb and followed an upwardly revised 0.3 percent increase in December. The leading index, which measures a basket of economic indicators ranging from unemployment benefit claims to building permits, is intended to forecast economic trends up to six months ahead.

Wholesale Prices Rise in Jan, Rate Hikes Seen - 2/17/06 Reuters
Rising prices for food, cars and electricity fanned inflation at U.S. factories and farms in January, while higher gasoline prices in early February caused consumers to be less upbeat, according to data on Friday. The inflation data helped financial markets, which are already counting on an increase in interest rates when the Federal Reserve meets in March, cement their expectations for another rate rise after that.

U.S. Jan. core PPI rises 0.4%, biggest gain in a year - MarketWatch 2/17/06
U.S. producer prices rose faster than expected in January, with price increases for cars, trucks, electricity and drugs leading the way. The producer price index increased 0.3% in January, while core prices (which exclude food and energy) rose 0.4%, the biggest gain in a year.

New Fed Chief on Interest Rates - NY Times 2/15/06
In an generally upbeat assessment of the economy, the Federal Reserve's new chairman, Ben S. Bernanke, said in remarks before a Congressional committee that the Fed may have to raise interest rates a bit further to assure that inflation does not flare up.

U.S. Jan. Retail Sales Rise 2.3% vs. 0.9% Expected - MarketWatch 2/14/06
Retail sales rose a seasonally adjusted 2.3% in January as gasoline and motor vehicle sales strengthened.

U.S. Savings Rate Hits Lowest Level Since Great Depression - PRWEB 2/8/06
For the first time since 1933, the U.S. personal savings rate has dropped into negative territory. Alarming economists nationwide, this troubling trend shows personal spending surpassing personal income for an entire year. And with baby boomers approaching retirement and young adults knee deep in dept, analysts caution that this risky behavior could put Americans in serious financial danger.

Jobless Rate Falls to Lowest Level in More Than 4 Years - NY Times 2/3/06
The unemployment rate fell to its lowest level in four and a half years in January as the economy added construction, education, health and other jobs.

Manufacturing Much Weaker Than Forecast - MarketWatch 2/1/06
The pace of manufacturing fell in December, coming in below Wall Street expectations according to a survey of business executives released Tuesday. The closely watched Institute for Supply Management's index came in at 54.2 for December, down from a 56.6 reading in November.

Higher Energy Prices - Reuters 2/1/06
Higher energy prices slowed growth at U.S. factories in January, while a jump in home building took construction spending to record highs in December, seemingly in defiance of a cooling housing market

Fed Raises Rates - Govexec.com 2/1/06
"In its last policy meeting with Alan Greenspan as chairman, the Fed [Tuesday] raised its short-term interest-rate target to 4.5% from 4.25% and left a free hand to his successor," the Wall Street Journal reports. "In a statement accompanying the rate increase, the Fed said, 'Some further policy firming may be needed' to keep growth steady and inflation low -- a signal that another rate increase is still on the table."

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THE ECONOMY: SEVEN INDICATORS - From CNN Money (as of 2/28/06)

The Indicator	What It's Telling Us	Next Update
Consumer Confidence	Fell in Feb.	Mar 28
Retail sales	2.3% gain ahead of forecasts.	Mar 14
Leading Economic Indicators	Hit record in January	Mar 20
Manufacturing Activity (ISM)	Expansion reaches 33rd month.	Apr.3
Industrial Production	Unexpected decline in Jan.	Mar 17
Job Growth	Big drop in unemployment rate, but growth still lagging.	Mar 10
Inflation (CPI)	Annual inflation at 4%; core at 2.1%.	Mar 16

Update Regarding Spousal Waivers and Charitable Remainder Trusts
On March 30, 2005, the Treasury and IRS announced guidance (Rev. Proc. 2005-24) "to provide a safe harbor procedure to avoid the disqualification of a charitable remainder trust" because of the existence of a spousal right of election under state law. That guidance grandfathered trusts created prior to June 28, 2005, provided a spousal right of election was not exercised. However, due to numerous problems associated with complying with the new safe harbor rules, IRS has now extended the grandfather date "until further guidance is issued."
Under the augmented estate rules of some states, it was possible (although very unlikely) that a surviving spouse may have the ability to invade the corpus of a charitable remainder trust. As a result, the IRS published Rev. Proc. 2005-24 and required a spouse to waive that right.
It is very possible that after a spouse passes away, the surviving spouse may remarry and that the new spouse would inadvertently not sign a waiver. Under Rev. Proc. 2005-24, many CRTs could be disqualified due to an unintended oversight. Therefore, commentators were extremely critical of the IRS requirement for a spousal waiver.
The IRS and Treasury are reconsidering the approach of Rev. Proc. 2005-24, including the safe harbor rule. The IRS said that until further guidance is issued on the effect of a spousal right of election on a trust's qualification as a CRAT or CRUT, it will disregard the existence of such a right, even without a waiver, but only if the surviving spouse doesn't exercise the right.
PGDC 2/3/2006 and GiftLaw 2/10/06

Give More and Live More
I know a time-tested and smart way to live longer: make a planned gift to a non-profit organization. A planned gift is a charitable gift that you commit to now and that accrues cash to a non-profit at your death. Your favorite non-profit will credit you with making a gift today and wait patiently for your demise, when they will collect. In the meantime, and for the rest of your life, the organization will invite you to annual recognition luncheons and dinners. Not a bad deal for a non-profit with patience and those of us with a little rope left.
Non-profits need prolonged patience because: people who make planned gifts live longer than those who don't. Appreciation for this highly-regarded axiom runs throughout planned giving circles.
There is company that investigates this seriously and finds that CGA (Charitable Gift Annuity) donors do outlive the national averages. Something about coming from a more affluent background with better access to health care, proper nutrition and the like.
Rubbish. 'Tis the act of giving what keeps you living.
Martignetti Planned Giving Advisors Forest Hills, NY 1/27/06

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Be Careful of Trusting 'Trust Mills'
Estate planning is big business these days. It takes a lot of work and a great deal of care to decide how to distribute your assets upon your death. You need to do that with the aid of competent counsel, yet some companies that claim to have that expertise really don't -- some provide limited aid and others perpetrate out-and-out scams.
Emery Gardner of Madeira answered a telemarketing call in 2002, and agreed to have a company draw up an estate plan for his wife and himself. He paid the company $1,695 for its services, including that of an attorney. How about the quality of the work the company performed in preparing Gardner's estate plan? He consulted a local probate attorney and learned there isn't much that's right with it.
The Better Business Bureau reports the company, Family First Estate Planning, has since been sued by both the states of Washington and California. California is seeking more than $110 million from the company and its principals alleging they operated a living trust mill that tricked seniors into using their retirement investments to buy annuities. The state says the annuities often made less financial sense for the elderly victims but earned the con artists substantial commissions and other income.
Neither the company nor the attorney returned calls for comment. Experts say trusts marketed and sold by some agents often lack many essential provisions and sometimes even create substantial ambiguity that can cause problems, and even litigation, after a death. They caution against one-size-fits-all documents generated by these trust mills.
The Community Press Cincinnati 1/25/06

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High Telemarketing Costs Limit Donations
Just 37 percent of the charitable contributions raised in New York last year by telemarketers actually went to the charities, according to a report released yesterday by state Attorney General Eliot Spitzer. All told, New Yorkers donated $170.6 million to 440 charities through telemarketing campaigns last year - but only $63.5 million was retained by the charitable organizations. The rest went to the professional fund-raisers in fees and other costs. In fact, 12 charities actually lost money trying to raise money, including a national charity which lost more than $175,000 in one telemarketer fund drive, according to the annual report on charitable giving.
"Donors are urged to give directly to a charitable organization rather than through a professional telemarketing campaign and to review the annual financial report of a charity before making a contribution," Spitzer said. His message may be catching on, as charitable giving through telemarketing campaigns dropped nearly 9 percent last year over 2003.
New York Post, 1/22/06

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Tax Exclusions, Limits and Credits for 2006
The IRS has released the tax exclusions, limits and credits for 2006. The estate tax exemption for taxpayers who die during 2006 has increased to $2 million, which translates to a unified credit of $780,800. The tax rate above $2 million is 46%. The annual exclusion for gifts has increased to $12,000, which is the amount each taxpayer may give to each non-charitable recipient, without reducing his or her lifetime gift tax exemption, which remains at $1 million for 2006. The IRS provides a good overview of current estate and gift tax rates and facts about these taxes on their website here: www.irs.gov/businesses/small/article/0,,id=98968,00.html
John Ebarre - Planned Giving Consultant - 1/16/06

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