Make Some Lemonade in These Stressful Times!

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We all know the phrase “cash is king”, but what does that mean in the midst of stressful times such as we are now experiencing with COVID-19?

As we consider group meetings, working from home and washing our hands continuously, life goes on. For some, the quarantines and public gathering limitations will create financial stress. Restaurants, airlines and of course cruise ships would all fit into this category.

But for others, this will simply be a momentary pause.

During this season, as we see interest rates at the lowest in our lifetimes, some assets will still sell. A friend of mine has had his house on the market for several months and although he received an offer that is much lower than his anticipated selling price, he plans to accept that offer because of the uncertainty of the future.

So, how does this relate to your donors, the folks who sustain our non-profits?
Example: We are currently working with a donor who is selling a business. His business has been growing by double digits for years. Their earnings in 2019 were more than $21 million. Just a few months ago, they would’ve expected a selling price of between $100 and $120 million.  But today, in this uncertain environment, they plan to accept an offer of roughly $80 million, or 4 times their profits. Not ideal, but a reality in these times.

This donor and his wife are in their early 80s. He is on the Board of Directors of a major international charity and are very generous to that organization and many others as well. Let’s look briefly at what happens if he sells this business outright, fully exposed to long-term capital gain taxes versus if he sells it through proper legacy planning.

If he sells it outright, assuming it is an all cash offer, his portion of the company worth about $30 million would be taxed at federal and state levels of roughly 29%. This will leave him with a net after-tax of $21,300,000. If he were able to earn 5% on those funds it would equal $1,065,000 per year in pretax income for his remaining retirement years.

Fortunately, our client charity introduced us some time ago. We have been working on both his anticipated business sale and his estate plan and were able to execute documents a few months ago. At this point, he has established a charitable remainder trust as well as a donor advised fund in anticipation of this sale. His plans are to put 40% of his company ownership into the charitable remainder trust prior to sale. He will also put 10% of his company stock into the donor advised fund prior to sale.

This would leave he and his wife with 50% of the company to be sold outright. Normally, this 50% would be subject to long-term capital gain taxes, however because of our planning he will receive charitable income tax deductions of $8,900,000. The result of this will be the 50% sold outright will pay no long-term capital gain taxes, leaving them the full $15,000,000 to invest.

As a result of anticipating a sale and proactively doing strategic legacy planning in advance, these donors will now have more income during retirement years, the ability to make current gifts to their favorite charities as well as legacy gifts in their estate. See the summary below.

No planning
Net after tax – $21,300,000
Income at 5% – $1,065,000
Gift to charity – $0

Strategic Legacy planning
Net after tax from 50% sold outright – $15,000,000
Plus 40% sold through CRT @ $12,000,000
Income at 5% – $1,350,000 (combined)
Gift to charity – $3,000,000 via DAF and $12,000,000 from CRT

Please Don’t Assume

Perhaps the biggest obstacle we must overcome as we work with charity executives is their assumption that high net worth donors “have all this planning done already”. The facts are that your high net worth donors became successful by identifying a product or service and focusing like a laser on that business. But for the vast majority of them, liquidity planning as part of a philanthropic strategy is a foreign language. This gives you an opportunity to serve them while also creating milestone gifts for your organization.

It is not intrusive nor is it crass to help a donor reduce taxes and increase their retirement cash flow through smart legacy planning. And, if they can also benefit their favorite charities versus sending millions of dollars to Washington D.C. – so much the better.

Tangible steps you can take

OK, so let’s assume that the message in this article has caught your attention. What are some practical steps that you can take? I would suggest there are three steps toward strategic legacy planning.

  1. Analyzing data
  2. Communicating with your benefactors
  3. Focusing on the relationship

1. This message of pre-sale planning for liquidity events is not something that you would mass market to 25,000 donors. Note: in our next article we will look at practical ways you can address the Middle America segment of your donor base during this Covid-19 pandemic. But within most databases, there will be a few donors (2-5%) that can identify with these issues. So how do you identify those donors?

There are several successful methods for identifying prospects for gifts of complex assets among your constituents. Predictive modeling focused on finding principal and planned giving prospects, wealth identification techniques that center on business, stock, and/or multiple property ownership as well as high-end giving to other nonprofits are some of most proven strategies.

Lawrence C. Henze, J.D.
Analytics Architect, Senior Principal Consultant
Blackbaud Target Analytics

2. Communicate with your donors. During stressful times, your business owner donors are even more intensely focused on “keeping the ship upright during the storm.” But in the midst of that you can communicate two things to them. First, the compelling mission and vision of your organization. Remind them as to why they are involved. Give them a recent uplifting story of a successful example of your organization’s mission or impact. Second, remind them that for their own benefit during this stressful time, making current gifts to charity out of appreciated assets versus cash will help them protect their cash position and retain the strength of their organization rather than depleting business cash resources.

3. Perhaps most important of all is to maintain the relationship. During these times when hopping on an airplane and flying across the country is probably not going to make sense, take advantage of technology using communication tools. Two of my personal favorites are Zoom (Zoom.us) and BombBomb (BombBomb.com). You’ll be amazed at how appreciative donors can be of a quick one-minute video email using BombBomb or as I said to one donor this morning, “in lieu of getting together, why don’t we set up a Zoom video call and have a ‘social distancing’ cup of coffee?” He laughed and quickly accepted the invitation.

The bottom line here is to encourage you to make lemonade during these stressful times. Look for ways that you can maintain relationships; communicate the vision of your mission while at the same time offering helpful information to those who might benefit from protecting their cash by gifting assets or by enhancing their financial outcomes during a liquidity event. Remember, Cash is King.

The Dark Underbelly of Wealth, and How to Save Your Kids from It

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The desire to bless our children, is God-given, but without careful thought can sometimes backfire. There’s a point where passing down wealth can cause irreparable damage to your children’s lives. When we speak about estate plans, there’s a lot at stake.

It’s not about money. It’s not prestige. It’s about our children — and our children’s children.

We all want the best for our children, and so we work hard to leave them an inheritance that will help them live the best life possible. It’s natural for a parent to give all they can to their children without a second thought. But there’s a hidden, dark side to wealth.

Most people don’t know how dangerous money is — or worse, they don’t want to think about it.

The truth is wealth has been a menace that has ruined many lives and destroyed many families.

“For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” – 1 Timothy 6:10 (ESV)

The story of King David’s family offers us poignant examples of the potential destruction of vast amounts of unearned wealth.

David was a nobody, a mere shepherd boy walking his herds through the Judean hills. Through God’s grace and an immense amount of hard work and risk, he amassed great wealth as the king of Israel.

His son, Solomon, inherited the lion share of his father’s wealth. He grew that wealth to the point where silver was as common in Jerusalem as stones (1 Kings 10:27).

After Solomon, the Davidic inheritance fell to Rehoboam. Rehoboam not only lost the bulk of the wealth, but he also lost the kingdom.

Shirtsleeves to shirtsleeves in three generations, not to mention the great tragedy and violence that befell the kingdom.

The Burden of Unearned Wealth

A while back, I was sitting down in my office with a lovely, godly couple who had flown in to speak with me about their estate plan.

The husband came from a privileged and blessed family background. The wife had come from poverty.

They met as young adults, fell in love, and raised a beautiful family together. Now, they had begun the serious conversation about what to do about their sizable estate when they passed on. Our conversation that day revealed the enormous disparity between their views of wealth, well-being, and legacy.

Having been raised in the gilded halls of high society, the husband felt all of that privilege had, in reality, stunted his personal growth. He believed that his personal maturity had been hindered by the fact that he did not have to work his way up in life, as his more seasoned peers had to do. He was reluctant to place the same burden of unearned wealth upon his children.

Giving our children everything can be dangerous for them. Make a plan. #estateplan #plannedgiving Share on X

To the wife, his reluctance signaled a lack of love and concern for their children. The emotions she carried about her lowly past went deep. She had been brought up in poverty — and she wanted her children to have no part of that upbringing! And so when the husband and I began discussing the idea of placing a cap of $3 million on each of their children’s inheritance, she wouldn’t have it.

You might think her silly. Or you might think her rightfully concerned for her children’s well being. But I’ve watched this scenario play itself out with families of all kinds of economic levels. It’s not the amount of money we’re talking about that makes any difference.

When we speak about stewarding our God-given resources, it’s how you view the role of money in your children’s lives that counts.

There is a point when inheriting greater amounts of wealth will do your children more harm than good. But as parents, it’s difficult to talk about. Our natural instinct to give all that we have to our children is strong (and noble). There are also times when we simply don’t know what questions to ask.

The Unasked Question

I once spoke with a couple who were selling their multi-million dollar business. We were talking through the sales process, and I brought up this simple, yet compelling question… How much is enough for your children?

What percent of your estate or what dollar amount is enough to launch your children into their ideal future?

If you can decide on that, you know how much is enough, and you’ll avoid harming your children with more wealth than they can handle.

How much is enough for your children? How much is too much? #estateplan #stewardship #plannedgiving Share on X

The husband said, “No one’s ever asked us that question. But it’s so important!”

Eventually, they came up with a number that was a fraction of the amount they would have placed in their kids’ revocable living trust. They had decided what was truly enough to be helpful to their children’s future, and how much would have been potentially destructive.

Because they capped their children’s inheritances to a level that was truly beneficial, they were able to keep the inheritances within the tax-free range. They cut the capital gains tax on the sale of the business dramatically. But even better, they were able to give those tax savings to the different ministries they cared about.

As for the earlier couple, they’re still working this out. It’s an ongoing conversation, and I’m proud of them for praying, thinking, and talking about it!

Have you started this important conversation with your spouse? Do you know how much is enough to launch your children into their futures — and how much would be harmful to them?

A Helpful Guide

To get the answers to these profound and sometimes troubling questions, you may want a guide to help steer the conversation and bring clarity to the legal or financial details of the conversation.

Someone from the outside with no agenda, no commissions, and nothing to sell. Just a well-informed person helping you ask the right questions. That’s why The Giving Crowd is here.

We’re here to help you work through these critical yet complex conversations so that you can best steward the resources God has given you. The call is free, and there’s no obligation. Let’s talk!

Millennials, Online Giving, & Asset-Based Giving: How It All Ties Together

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Vanco Payment Solutions recently published their Churchgoer Giving Study: Findings Report. While delivering some sobering news, there are seeds of opportunity for the future.

The findings of Vanco’s study is similar to the studies we shared with you HERE and HERE.

While you may not feel the need to change what you’re doing based on the findings of one study, all of these different studies being done by various organizations are pointing to the very same results.

This isn’t a fluke or a gimmick being pulled on us by a special interest. This is the way things are, and we’d do well to heed what the data is saying.

The Findings

The Vanco study will sound like an echo from the previous studies we’ve spoken about, but here’s a quick list of the results:

  1. More people prefer e-Giving than before.
  2. e-Givers participate more in church life than those who give by traditional means and they give a higher percentage of their salary.
  3. Church attendance is down. Church giving by traditional means is also down.
  4. Millennials love e-Giving, give more of their annual income than others, and participate more than other age groups.

This is an interesting set of information with lots of implications.

Online Giving

But first, let me just repeat what Vanco said in its analysis. If you haven’t done so yet, you NEED to implement an online giving strategy for your church! My friend, it’s time to embrace technology and give your people options in how they can give to the mission of your church.

Especially since Millennials prefer e-Giving, one of the biggest ways church leaders can engage with these generous young people is to provide them with the platform they are most comfortable and familiar with.

Coming Into Their Own

There used to be a lot of doubt in the upcoming Millennial generation being expressed in church and business publications. So much so, this young man was inspired to ask us all to pray for them!

But the fact of the matter is that they’re showing the world their own set of values and ways of doing things. The Vanco study revealed several key points about Millennials in our congregations that we need to take note of and celebrate.

They give more of their annual income than other age groups. Specifically, they were more likely to give a tithe of their annual income. And Millennials were more involved in volunteering in their church than other age groups.

These two findings reveal a deeper aspect of the Millennial generation: a devotion to Biblical teaching and living.

A Stewardship Opportunity

This is not something we should take lightly. Church leaders should pick up on this fact and run with it!

In this study, we see a generation that has a proven track record for reacting to biblical teaching on giving and stewardship.

So while it’s true that most Millennials don’t have a lot of assets to give to support the mission of your local church now, you can form their understanding of biblical stewardship to include asset-based giving as well as online giving.

Take time to invest in upcoming Millennial leaders and we can change the way we fuel our church's mission. Share on X

Vanco’s study is packed with present-day, actionable insights for church leaders. But it also lays the groundwork for how church leaders can pave the way for the financial future of their church.

If we take the time to invest in this young generation of upcoming leaders, we can dramatically change the way we fuel the mission of our churches.

If you’re ready to know more about how asset-based giving can sustainably fund your church into the future God has for you, let’s talk!

The call is free, and there’s no obligation.

The Lifestyle Finish Line: When Is Enough… Enough?

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The most important conversations are the hardest ones to have. Nowhere is this truer than in conversations around finances, generosity, and contentment. That’s why an objective third-party stewardship professional is critical to engaging your donors on these topics.

There is a point—an amount—at which a person or family has more than enough money to pay for what they want out of life. The home, the cars, the education, the savings, etc.

This number will not be the same for everyone. And not everyone will attain it.

But it is very real.

Our friends at Generous Giving refer to this number as the “Lifestyle Finish Line.” This is the financial line that when crossed, the person or family has enough to cover the ongoing expenses of their lifestyle.

Mark the Lifestyle Finish Line Well

A big problem you see all the time is that most people (your donors) do not know their number. They do not know when enough is enough.

And so they keep working hard to get even more money, assets, investments—the list goes on and on. They get stuck on the treadmill of materialism thinking that if they just had more, they would be satisfied.

This is a tragedy.

When an individual does not clearly mark out their lifestyle finish line, they’ll never find it. They’ll never know they’ve crossed it.

When a person doesn’t clearly define their lifestyle finish line, they’ll never find it. Do you know yours? Share on X

For people who’ve not clarified that number to themselves, the line keeps getting moved. Success avoids them like the elusive carrot on a string. So close… but yet so far.

How Much Land Does a Man Need?

Not knowing one’s number can be dangerous. There’s a short story told by Leo Tolstoy about a Russian peasant named Pahom. In the story, an ill-fated thought comes into his head.

“If I had plenty of land, I shouldn’t fear the Devil himself!”

One day, an opportunity came for Pahom to buy some land from an uneducated, indigenous tribe who offered him all the land he wanted for a low price. The catch?

Pahom could only buy the land he could walk around in one day—he had to start at one point and walk an entire circle back to that same spot.

Pahom was ecstatic. The land those dimwitted tribesmen owned was by far the richest soil he could imagine to farm on. He could easily walk 35 miles in a day, which meant a lot of land—and a lot of money from farming it!

He started out early. He made good time, marking his way with a spade shovel as he went. But as the heat of the day wore on, Pahom got wearier and wearier.

But each time Pahom thought to make a turn to make his way back, he decided to go even further ahead because “The further one goes, the better the land seems.”

Suddenly, he realized that he could never get back in time. The sun was almost to the horizon—and he was 10 miles away!

Pahom pushed himself hard. And he made it, to the cheers of all the tribesmen.

But he wouldn’t enjoy it. Pahom died of exhaustion, watching the Devil laughing at him.

Pahom’s servant buried him there. Come to find out all the land he needed was six feet from his head to his heels.

The Line Where Generosity Begins

While the personal tragedy of Tolstoy’s story is profound, the tragedy goes deeper than one’s own life.

When a person does not know their lifestyle finish line, they’ll never have enough, and therefore, they’ll never feel like they have any extra to give.

But if they clearly mark their lifestyle finish line, they can find the freedom they need from the hamster wheel of always working for more, and begin to give more.

A clear lifestyle finish line frees you from the materialism treadmill. When is enough, enough for you? Share on X

In this sense, the lifestyle finish line is where generosity begins.

When your donor knows they’ve reached their number, they are confident in giving extravagantly to your cause because they fully realize just how safe, satisfied, and blessed they are.

Everything above and beyond the number they’ve set is ready to be invested in the causes that are dear to their heart.

There’s complete freedom, complete confidence, complete joy in giving when they’ve crossed their lifestyle finishing line!

How do you get them to mark out their line?

Most of the nonprofit and ministry leaders I speak to understand this concept very well. They want all of their donors to be comfortable and have all they need for their lifestyles.

But you probably know that you have some donors who could give much more than they do. You know that giving more would not interfere one iota with their lifestyle or personal security.

So how do you bring it up?

You don’t… You can’t.

This is the hard truth about leading a nonprofit or being a fundraiser. You know certain donors could make transformational gifts that would change both your organization and them in beautiful ways. You know that giving to their potential would bring them greater joy and satisfaction in life.

But you can’t bring it up. You’ve got something to gain—and that creates an unavoidable conflict of interest.

Helping Donors Mark Their Finish Lines Well

That’s what The Giving Crowd is here for. We are a team of stewardship professionals that are committed to having these kinds of confidential conversations with your donors—so that your donors can find their finish line.

And when your donors find their lifestyle finish line, they’ll find the starting line for a new level of generosity.

For example, my family and I are devoted to Compassion International’s mission to sponsor children in impoverished areas around the world. But, I’d never talk with a Compassion International representative about how my financial life is doing or how to decide on my lifestyle finish line.

And I wouldn’t have that conversation with any other nonprofit representative—it would be just too awkward! Worse yet, it wouldn’t be appropriate for them to know me that intimately.

That’s where financial and stewardship professionals can come alongside both donors and nonprofits like you.

We can talk with donors about these deep, important issues because we’re an objective, third party with a proven track record of helping donors not only discover how much is enough but also where they want to make a difference in this world.

If you’d like to know more how we can help unlock your donor’s giving potential and level of joy in life through biblical stewardship, let’s talk!

The Very Real Danger of Inheritances No One Talks About

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Values & Valuables (Part 3 of 3)

The idea may shock you, but many lives are destroyed by the impact of sudden wealth through inheritance. As leaders of churches, ministries, and nonprofits, it’s up to us to start the conversation.

Nonprofit and ministry executives cannot assume that legal or financial advisors are helping their clients (your donors) to understand how they can pass on their values along with their valuables.

For decades, large financial institutions and attorneys have assisted individuals in making a will, estate plan, etc. And the goal has largely been the same: create the fastest, smoothest transition of assets from one generation to another.

By 2038, over $41 trillion will change hands through inheritance. Is your organization prepared for this shift? Share on X

Unfortunately, the large majority of people who will inherit these assets will receive their parents’ or grandparents’ valuables while missing out on the values of the loved ones who’ve passed on… much to their detriment.

A Tale of Caution

Early in our marriage, we had a neighbor who was an only child whose parents passed within a few months of each other. Prior to the passing, it was a loving relationship and the couple seemed close.

After the passing, the young man inherited the parents’ house and an undisclosed sum of money. We never knew how much they inherited, but it was likely $100,000 or more in cash, plus the home. They felt set for life.

Sadly, the inheritance virtually destroyed that young couple’s marriage.

They immediately changed their lifestyle: bought a Corvette, an SUV, and moved into the parents’ house. Soon after moving in, they started remodeling the house.

The remodel destroyed any remnants of mom and dad, past memories, or even values the son had grown up with. At the same time, this loving family was soon demolished.

They were at each other’s throats — so much so that at one point, my wife had to call the police for fear of the woman’s safety.

This horrible situation is a great example of passing valuables but not values to your children.

A Life and Death Situation

There is very real danger in passing on your valuables without passing your values — and no one wants to talk about it. But it can destroy the ones to whom you leave your wealth.

In fact, it doesn’t even take millions of dollars to be detrimental to your heirs.

A few months ago, I spoke with a donor who told me, “The last time I saw my son, he was living under a bridge in Fort Worth, Texas.” This father knew that if he left even a small inheritance of $5,000 or $10,000, it could easily end his 20-year-old son’s life through a meth overdose.

That father knew that passing his valuables on to his son could have killed the young man.

Despite very real, life-or-death situations like these, the financial services community continues to focus on valuables, not on the person’s values.

I spoke with a Texas estate planning attorney a few years ago. I asked why he didn’t include charitable giving as a possibility to his clients. He responded that he felt it was outside his ethical parameters to introduce the subject.

How can that be off limits when you are clearly working with a family that has charitable giving, philanthropy, or spirituality as part of their core values?

It wasn’t that the attorney wasn’t qualified. He could draft some of the most complex charitable trusts for foundations and charities.

Far too often, it is the training, the habits, or the ethics of financial advisors or attorneys that limit these conversations.

It’s Up to You

Focusing solely on passing your valuables is efficient. But is it truly beneficial to your family or your legacy? Share on X

The best thing for your family — and those of your donors — is to ensure your estate plan creates the financial environment where your values are fostered or empowered in your heirs.

As your assets transfer, whether during life or at death, your planning should cover your family values and how the exchange of valuables will occur.

But this is not typically going to happen through traditional legal or financial counsel.

An untapped pathway to reverse this trend and help families leave a lasting, helpful legacy to their children as ministry, church, and nonprofit leaders is to start the conversation. We must show them how they can pass on their values as well as their valuables!

You and I must bridge that gap to bring values back into the estate planning conversation.

The average American would much prefer to “disinherit the government,” reallocate those funds to support their values and leave a lasting legacy that supports the family instead of tearing the family apart.

Getting the conversation started

As nonprofit and ministry leaders, we are in a unique position to help our constituents avoid the very real danger of passing on valuables without values. But for many leaders, this isn’t always easy.

That’s where we can help. We’d be happy to put our 50 years of combined experience in planned and asset-based giving to use in helping you achieve your organizational development goals.

To see if we’re the right fit for you, let’s talk.

Values & Valuables: How to Pass on Your Values Along with Your Valuables

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Values & Valuables: Discovering Values in the Valuable Void (Part 2 of 3)

Financial planning, legal, and accounting firms admittedly focus only on the transition of your assets to the next generation — so how do you pass your values along with your valuables?

We left off last time discussing how Mark Zezbaugh, a high-ranking executive in the financial planning field, confessed that his company focuses on delivering a smooth transition of assets from one generation to another.

He admitted that they don’t do much to help donors pass along their values to their heirs.

He partnered with marketing think tank Age Wave to conduct a study to find the baby boomer generation’s top four priorities when it came to estate planning.

The study showed that the number one goal of baby boomers is to pass their values to their children. Share on X

Passing their wealth, was only number four.

People’s values can be cultural. They can be spiritual. They can be personal.

Values embody the important elements of your family and your belief system.

This means that your values are the most important element of your estate planning because it is the foundation of your legacy.

However, what is important in my values, family, and beliefs may not be the same for your family.

So, if financial planning experts aren’t giving it a single thought, how do people pass on their values to their heirs?

A Lifetime of Generosity

The first way to pass along your values to your heirs has nothing to do with your will. Instead, it has everything to do with the life you’ve lived and the example you’ve given to your heirs.

If you are like most average Americans, you have faithfully donated funds to certain organizations over the course of your lifetime.

No matter your gifts size, your faithful generosity leaves a powerful impression on those around you. Share on X

It doesn’t take a large amount of money to pass on your values!

A Lifetime of Volunteering

If you’re thinking of leaving a lasting legacy then it’s safe for me to assume you’ve spent time raising money or participating in some sort of volunteering.

This is a powerful component of the example you’ve set for your family and other heirs. Don’t think of your service hours as simply the least you could do — they’re the best thing you could possibly do!

Gifts often go unseen, but your volunteering reflects the causes and ministries that are dear to your heart. Share on X

Believe me, the next generation sees that and makes note of it.

An Estate Plan that Reflects Your Values

Money reflects your values so strongly that it can make or break a family. Strengthen your family and heirs by creating an estate plan that accurately and creatively reflects your values.

Your estate plan should communicate clearly what you care about.

You might have to get a little creative to make your values shine through — but there are amazing ways to use your estate plan to pass along your values. I know one family who set aside money in their estate for annual donations, so their children could get involved in making a strong impact on others.

Another family set aside funds specifically so that each individual family could create lasting memories by going on an annual vacation.

In both cases, the initiators of those values may not have been physically present — but they are still making a lasting impact on future generations and their communities.

Serve Together

If you are a pastor or nonprofit ministry leader, create an environment that encourages folks to pass their values on to the next generation.

Perhaps this involves taking an intergenerational mission trip where families can serve together in a common cause.

Perhaps it means putting on a donor event for their children so the children can enjoy the same level of joy in giving that their parents experience.

Perhaps it is bringing in outside speakers or curriculum to help people understand the biblical idea of passing on their values to the next generation.

“A good man leaves an inheritance to his children’s children, but a sinner’s wealth is stored up for the righteous.” – Proverbs 13:22

One of the questions we get frequently here at The Giving Crowd is — what do other people do?

We’ve worked for decades helping donors identify their values and pass them along to the next generation. We’ve seen and been a part of some of the most inspiring intergenerational stories of giving and family values.

We’d be happy to share these stories with you, help you sort out the values that God has placed on your heart, and show you the many ways those values can be translated into your estate plan.

No obligation and no fees – so get a hold of us today!

Or, if you’re a pastor or nonprofit ministry leader, you may need someone to walk alongside you to help implement an environment of intergenerational giving.

If so, we’re ready to help. The call is free – so contact us today and see if we’re the right fit for you.

Why You Must Have an Estate Plan

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When is the Right Time? Importance of EOF Planning

Creating an estate plan is something we often put off till another day. The problem is, none of us is guaranteed another day will arrive. That’s why you must have an estate plan as soon as possible.

The only thing that is certain is death and taxes.

But with taxes, at least you know the deadline. With death, you don’t know when your time is going to come.

We can live to reach 100, or we pass all too soon. For many of us, death takes us by surprise.

At The Giving Crowd, we encourage folks to take a fresh look at their estate planning every 3 to 5 years. Share on X

You should check your estate plan and refresh it every 3 to 5 years because significant life events that change the number of your dependants like getting married or having more children will affect the financial and legal details of your plan.

For example, it’s easy for a young couple to dismiss an estate planning session or a need for a will. They’re young, just getting started in life, and may not have much beyond student debt.

But, once you have that baby, the whole world changes. It becomes imperative because you are taking care of someone else’s life.

Without a will or a trust, the state has the right to decide what happens to your child(ren). (It’s called the law of intestate succession.) Your child could end up with a relative that is unfit.

Worst-case scenario: your child could end up as a ward of the state.

On the other end of the sociological gamut is the business owner or the wealthy executive.

These individuals have a different level of estate planning needs. They are concerned about their family, but their estate also contains their business, investment properties, and other assets.

Living Trust Vs. Estate Plan

People of all backgrounds assume that if they have a living trust, then they are all set.

This is not true — a living trust only avoids probate and maintains the confidentiality of the estate.

The individual’s estate is still exposed to state and federal taxes. Without proper estate planning, these individuals open themselves up to a much wider variety of taxes that can erode the balances of the estate.

A Complete Plan

All too often, estate plans lack succession planning which forces a sale of these assets and closure of the family business. The ensuing chaos is all due to inaccurate, improper planning.

An incomplete estate plan can leave your heirs with a smaller inheritance, little impact, and a large tax bill. Share on X

Proper planning, on the other hand, can reduce or even eliminate state and federal taxes connected to the estate. A proper plan of action provides your heirs with:

  • A succession plan that arranges for the smooth transfer of business assets such as a business, investment properties or investment portfolio.
  • A larger portion of the estate because taxable areas concerning the estate are partially or completely eliminated.
  • A distinct reminder of family values that are bestowed to the next generation because the previous generation has donated to charities consistent with the family’s traditions and values.

You Can Count On It

So, whether you have a modest or a massive estate, death and taxes are both certain.

Proper planning is a way to avoid the tax portion. A traditional living trust is not enough — it’s just one element of your estate plan.

There are several nontraditional items that can be used to disinherit the government and make sure your assets go to your family and favorite charity. You have the power to avoid the common pitfalls surrounding death and taxes with proper end of life planning.

To learn more about how to disinherit the government and create a legacy with your estate for generations to come, let’s talk.

Does Your Financial Plan Reflect Your Values or just Your Valuables?

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Values & Valuables: The Overview (Part 1 of 3)

Financial planning is good — except when it only focuses on your valuables and ignores your values. Your financial planner is probably not going to help you with this. Here’s why.

The billions of dollars raised by charities each year only represent a small fraction of the average American’s net worth.

The reality is these monies represent the fluid currency of cash – which is a mere 9% of the total net worth of the average American. The other 91% is in assets: 401(k)s, home equity lines, retirement plans, life insurance and so forth.

Many donors wish they could release the full giving potential of their valuables to further the charities that resonate with their values.

But how can you, as the average American donor, address philanthropy in the context of items that are not in your checkbook or in cash?

You live in your home. You need your retirement plan. And your life insurance is only available after death.

You’ve spent years being faithful to live the life well that you’ve been given. You’ve worked jobs, raised a family, participated in the community, etc.

And through your faithfulness, you’ve created wealth in terms of assets, friends, homes, and values.

Both your values and your valuables should be celebrated.

For most individuals, the gift to charity in their estate will be the biggest impact they will be able to make in this lifetime. Perhaps that’s you, too.

But you’re probably not going to hear this from your chosen charities or your church.

Often nonprofit executives look at potential donors like you — especially in a church setting — and assume that philanthropic elements like wills and trust planning are being done by your financial planners or attorneys.

However, financial planners and attorneys are only looking to find the most direct path to transfer wealth from one generation to the next.

But these financial professionals leave it up to nonprofit executives and church leaders to educate you on value-based charitable giving or legacy giving.

And because each believes the other is discussing this information, you might never hear about planned charitable giving in a way that helps you direct the 91% of your wealth towards the values you care deeply about.

A notable opinion on this issue is offered by Mark Zezbaugh, the former CEO at one of the biggest financial companies in the world.

He openly exhorts the financial service community regarding the normal pattern of advisors assisting clients in passing on their financial wealth to the next generation, without consideration of charity or values-based giving.

But in a study Mark conducted with Age Wave, the results showed that for aging Americans…

The #1 priority is passing their values onto their heirs. Passing their wealth — their valuables — is only #4 on the priority list.

That just makes sense.

You have spent years developing your children, demonstrating your values and hoping for it to make a lasting impression.

I’d rather my three daughters share my values than have the life insurance money or trust fund (valuables) — even though I want them to have that too.

I am more interested in my children becoming healthy, happy women than making sure they are financially set.

Is your estate planning only focused on valuables? What are some ways to pass your values to the next generation?

The good news is that your estate planning can celebrate both your values as well as your valuables by donating portions of your assets to your charity or church.

To help you unlock the full potential of your giving capacity, we offer a service helping donors like you explore ideas on estate giving. No cost. No obligation.

If you want to see how you can minimize your tax liability and pass on your values by giving to charity, let’s talk!

The Simple Retirement Planning Hack that’ll Save You Thousands

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Demystifying Inheritance Taxes

Up to 40% of the wealth you pass to your heirs above the tax-free mark will go to the government — unless you implement this little-known retirement planning hack.

When I began this work in 1980, the amount that Americans could pass tax-free to the next generation was $161,000. Everything above that amount was taxed at the federal level to as much as 70% percent! Yikes!

Thank goodness those days are distant memories.

Today, each of us can pass more than $5 million to the next generation tax-free — (nearly $11 million for married couples) if you know this often overlooked planning step.

In truth, there are very few people that will be faced with the inheritance tax, estate tax or what’s otherwise known as the death tax.

However, the tax that does affect most everyone — including you — is the IRD (Income in Respect to a Decedent) tax.

In short, this tax involves the normal tax on a person’s IRA, 401(k) or 403(b).

These accounts require taxes to be paid because the individual did not pay the tax prior to putting money into these accounts while they were working.

The benefit was that you could have lower taxes now and then those taxes would be paid later when in retirement. The IRD tax is typically applied when a person dies prematurely or submitted a substantial amount in the IRA, 401(k) or 403(b).

And it doesn’t matter whether you’ve got $10,000 or $2 million in this type of retirement plan, you’ll be paying a heavy income tax rate on that money.

In some cases, up to 40 cents on the dollar.

There are several solutions to this tax situation. But here’s the simple hack that could save you thousands.

Simply, change the successor beneficiary on your IRA, 401(k) and 403(b) accounts to a charity.

When you die, you can give an unlimited amount of money to your spouse tax-free.

However, unless you change the designation, you will still pay the IRD tax rate on every dollar you tucked away for retirement.

So, what do you do once your spouse inherits these accounts, tax-free?

Then, change the beneficiary on your spouse’s accounts to a charity.

This type of account does not go to the living trust or to your children — only to the charity or charities you’ve designated.

If your spouse and you do not do this, the tax bill could be up to 40 cents per dollar. That means on a $1 million 401(k) account, the tax bill could be $400,000!

In changing the beneficiary to a charity, you eliminate the IRD or income tax bill and create possibly the largest gift in your lifetime.

Have you disinherited your children? No.

In fact, everything else is tax-free to your heirs: life insurance, investment property, investment portfolio, etc.

All will pass to your heirs tax-free through your estate — that is unless your estate has exceeded that $5,490,000 limit.

For most families, this enables your children to receive a clear majority of your estate tax-free…

…AND your selected charities will receive a generous gift…

…AND you’ve eliminated the most overlooked tax in America.

To save you and your heirs thousands of dollars in death-related taxes, we offer a service helping donors like you explore ideas on maximizing your tax savings potential through giving.

No cost. No obligation.

If you want to see how you can minimize your tax liability by giving to charity, let’s talk!

How to Save Tens of Thousands of Dollars in Overlooked Taxes

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You Have a Tax Problem But You Don’t Have To

Paying the taxes you expect to pay is hard enough — but paying unexpected taxes is super painful and often avoidable! But you can save tens of thousands of dollars in these commonly overlooked taxes by being generous with your IRA and 401(k) accounts.

Tax time can be such a headache — especially if you have multiple retirement accounts from various places of employment.

$50,000 here… $100,000 there… It makes me thankful for accountants!

Most financial professionals recommend rolling over the various IRAs into one account.

Despite this advice, people have told me that they keep these IRAs separate so that they know which one will “pay” their future “death tax.” Or they tell me they are going to hold off on doing anything with those accounts because they will just roll over into their children’s IRA accounts.

In either case, these folks are only putting a bandaid on the problem.

They still have a tax problem that hasn’t been solved.

Thirty years ago, the IRS created these accounts to help average Americans save money for retirement while also stretching the paycheck.

However, when planning for the latter stages of life, most people forget they still owe taxes on their IRAs, 401(k)s, etc. They treat it like regular income.

Overlooking these retirement account taxes can produce quite a shock!

For example, if you have $250,000 sitting in your 401(k), when you empty the account, the math will look something like this:

$250,000 x 35% (Average American tax bracket) = $87,500 TAX BILL

That is a VERY steep tax bill to forget about — and a huge windfall for the US Government!

By some estimates, there is over $15 trillion sitting in IRAs and 401(k)s!

Doing the math again, this means the government will receive trillions of dollars in death-related estate taxes from baby boomers passing away with money left in their retirement accounts.

But these taxes can be diverted. Your accountant or your financial advisor might have even suggested some of these options:

  • Give an unlimited amount to my spouse tax-free,
  • Give your kids the IRA to avoid the taxes to your estate, or
  • List one of the IRAs as the one that is going to pay all the estate and death taxes.

However, these just shift the fiscal responsibility elsewhere instead of eliminating the tax altogether.

The headaches continue.

When IRAs were created 30 years ago, no one expected to have over $15 Trillion sitting collectively in peoples’ accounts.

Today, those resources are static and not making a difference in anyone’s life.

But what if there was an option to use these static funds to bless an organization or mission you cared about?

Wouldn’t it be amazing if you could disinherit the government…create a legacy gift for an organization you cared about…and not significantly affect the resources you have to pass to future generations?

You can! It’s simple.

Donate the IRA or 401(k) to a charity of your choice.

There are a variety of ways to save tens of thousands of dollars in retirement account taxes. Some options can be implemented during your lifetime and others upon death.

Here are two that I recommend fairly often:

Way #1: Give up to $100,000 to a charity…tax-free.

Anything over that will need to pay income taxes. Couples over 70½ can give up to $100,000 each.  You will still be paying some taxes — but you won’t be paying unnecessary taxes.

Way #2: Change your 401(k) or IRA successor beneficiary to a charity or nonprofit.

In changing the estate recipient to a charity, it will eliminate the tax responsibility. This allows you to pass your house, your life insurance and other assets to your heirs tax-free.

In the end, it’s not about the money. It’s about the impact you want to make.

Any way you choose to save your retirement money by giving, you can make a larger impact on the world than you ever imagined.

And it’s certainly more inspiring than giving your money to the government!

What kind of life-giving impact can you make with your retirement funds by saving tens of thousands of dollars in taxes? How can you make that a part of your legacy?

To save you and your heirs thousands of dollars in death-related taxes, we offer a service helping donors like you explore ideas on maximizing your tax savings potential through giving.

No cost. No obligation.

If you want to see how you can minimize your tax liability by giving to charity, let’s talk!