This month’s Giving Corner article is a bit different than those sharing complex Estate Planning strategies. I’d like to share a simple personal story with you that you may find you’d like to emulate. This strategy involves a current gift. It is quite simple to put into practice and it may provide both .
. . .Income Tax as well as Transfer Tax savings.
My extended family of 13 folks are fortunate in that we all live rather comfortably and are in a financial position to share gifts generously among ourselves. Several years ago, our situation had become what I’d refer to as “out of control.” Each member of the family would provide not one, but several gifts for everyone else. The pile of gifts under the tree at Mother and Daddy’s house, despite being clustered closely, extended almost halfway across the room! As we spent our Christmas morning unwrapping all that “stuff” one-by-one so everyone could see and admire, the process could consume up to a couple of hours. I recall one year some family friends had dropped by as we were starting to open gifts and it became clearly uncomfortable for them being subjected to this lengthy process of gift gluttony.
That experience is what really convinced me it was time to institute a change; this tradition in our family had become ridiculous. The following year, as the holiday season approached, I reached out to my family members and announced that most of my giving would be for charity. I would offer one thoughtfully chosen, modest gift for each family member, while otherwise benefiting charity with gifts in their honor. Since we are a farming family, I identified Heifer International as my charity of choice and I strongly encouraged others to follow suit. Some folks indicated that they had other favorite charities they’d prefer to support – or prefer that if I were making a gift in their honor it would go to a different cause. It took a few years to convert my family members to this practice, but gradually we got to a more reasonable exchange of special, thoughtfully-chosen personal gifts and helped a lot of very worthy causes in the process.
When you are making such “in honor of” gifts, some charities will follow up and notify the person in whose name you make the donation. Being an artist myself, I always enjoy creating that notification myself. I’ve often made bookmarks “While you are enjoying your favorite book, remember that a gift of – bunnies or bees or whatever – was made in your honor.” Then I’d add a picture of whatever animal I’d donated. Of course, NAZCCA would appreciate your gift if you are so inclined. The cause of combatting the Climate Crisis is so very dire, any donation you may choose to share would be welcomed. We are working on adding to our website the functionality to send that notification to your “in honor of” recipient and hope to have that completed soon.
To recap this month’s strategy of making a charitable gift in honor of your family member or friend, it would be a current gift to the charity. It is simple to accomplish and, depending on your personal financial situation, it may provide some income tax savings in the form of an income tax charitable deduction. If your wealth is such that your estate would be subject to estate taxes upon your death, making charitable gifts can serve to reduce the value of your taxable estate. NAZCCA is a 501(c)(3) charitable organization and would welcome your contribution in whatever amount your heart and finances dictate.
Bonnie Lane
Verde Volunteer
Member, Board of Directors
NAZCCA is not licensed to give legal or tax advice and any planned giving strategies you choose to pursue should be discussed with licensed tax and legal counsel