Many Roads Can Lead to Your Best Giving

It is the time of year when spring breaks and travel are top of mind. Whether traveling by plane, train, or automobile, you ultimately reach the same travel destination. Your journey may include a combination of these options. This is an excellent analogy for how we can think about blended gifts. Blended gifts enable you to help your favorite organizations, often through the Community Foundation of Lorain County, in more ways than you might believe possible. Blended gifts can be a win-win for you and the charitable recipients.

So how do blended gifts work? Suppose you wanted to make a significant charitable gift but only had a portion of that gift available in cash this year. With this year’s cash gift, you could commit the remaining balance as a legacy gift in your will or other estate plans. If you have life insurance or retirement accounts, you can designate Community Foundation as a beneficiary of some of those assets. You may want to use that instead of your cash to get better tax savings now while still leaving the bequest in your will if you have appreciated stock. You can also consider giving appreciated assets like real estate or business interest that may be able to be transferred tax-free. There may also be ways to generate tax savings and provide you with a stream of income payments for life. Ultimately, there are various ways to get to your giving destination.

Sometimes as we travel, we see problems on the road ahead and look for a way around them. Such is the case for many people with IRA accounts, which can create unintended tax consequences for the next generation if inherited. Also, if you are 72 or older, you know you must withdraw minimum funds each year from your IRA and pay taxes on that income. Rather than take the distribution yourself, take advantage of a handy detour: the IRA charitable rollover. You can transfer funds from your IRA to the Community Foundation or your other favorite non-profits. Your custodian needs to make the transfer directly to us, not take the distribution yourself, and you do not pay income taxes that would otherwise be due when you do. This can be done for up to $100K each year from your IRA, and if your spouse has an IRA, they can do the same. The best part is you can start using your IRA for charitable giving as soon as you reach age 70½ before you may need to take the minimum distributions.

Regardless of your giving destination, we can help create a more pleasant journey. Let us help you use your blended gifts to enhance your investment in our community.