Smarter Giving

Make a difference and save on taxes. It is possible when you support St. Luke’s through your IRAs Required Minimum Distribution (RMD). Some people find they do not need their IRAs RMD but are unsure what to do because they will need to pay tax on it. Transferring (rolling over) your RMD to St. Luke’s will prevent you from paying income tax. 

A Special Opportunity for Those 70½ Years Old and Older

You can give any amount (up to a maximum of $100,000) per year from your IRA directly to a qualified charity such as St. Luke’s without having to pay income taxes on that money. This popular gift option is commonly called the IRA charitable rollover, but you may also see it referred to as a qualified charitable distribution, or QCD for short.

Why Consider This Gift?

• Your gift will be put to use today, allowing you to see the difference your donation is making.
• Beginning in the year you turn 72, you can use your gift to satisfy all or part of your required minimum distribution (RMD).
• You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
• Since the gift does not count as income, it can reduce your annual income level. This may help lower your Medicare premiums and decrease the amount of Social Security that is subject to tax.

Marketable Securities that have increased in value and been held for more than one year are one of the most popular assets to use when making a gift. Making a gift of securities offers you the chance to support God’s work while realizing these important benefits for yourself:

• When you donate marketable securities you have held for more than one year, you can reduce or even eliminate federal capital gains taxes.
• You may also be entitled to a federal income tax charitable deduction based on the fair market value of the securities at the time of the transfer. Speak with your financial advisor.

Securities are most often used to support St. Luke’s through:

• A direct gift. When you donate securities to St. Luke’s, you receive the same income tax savings that you would if you wrote us a check, but with the added benefit of eliminating capital gains taxes on the transfer, which can be as high as 20 percent!
• A transfer on death (TOD) designation. By placing a TOD designation on your brokerage or investment account, that account will be paid over to one or more persons or charities after your lifetime.

Some people prefer a simple method for making charitable gifts. If this is you, then we suggest a beneficiary designation approach.

Enjoy increased flexibility when making gifts through beneficiary designation on these items: 

• IRAs and retirement plans
• Life insurance policies
• Commercial annuities
• Marketable Securities and Investment Accounts

It only takes three simple steps to make this type of gift.

1. Contact your retirement plan administrator, insurance company or financial institution and ask for a change-of-beneficiary form for the accounts you wish to make St. Luke’s a beneficiary. 
2. Decide what percentage (1 to 100) you would like St. Luke’s to receive and name us, along with the percentage you chose, on the beneficiary form. You can name St. Luke’s as the primary beneficiary or a contingent beneficiary. 
3. Return the completed and signed form to your plan administrator. They will take care of the rest.
   

When the Lord calls you home to Heaven, the plan administrator for your account will contact St. Luke’s about transferring your gift for ministry use.

For reference:

Our Name(s) & Tax ID Numbers:

St. Luke’s Lutheran Church & School EIN # 59-1153406

St. Luke’s Lutheran Church & School Foundation EIN #: 27-2990638

An Example of How It Works

Dennis and Barbara are receiving an inheritance from Barbara’s father who recently passed away. She is told she will be receiving $50,000 from his life insurance policy as well as $25,000 in marketable securities. They wanted to add the securities to their current stock portfolio but their financial advisor told them they would be required by the IRS to pay any capital gains taxes on the securities and that could be as much as 25% of market value.

St. Luke’s Transfer the Blessing counselor advised them to take this approach:

1. Donate 100% of all the $25,000 in marketable securities to ministry work as a charitable gift. In this case, they chose a gift to St. Luke’s scholarship fund.
2. This stock donation completely eliminated their capital gains tax on any securities.
3. He then advised them to take some of the tax free life insurance funds and purchase as much of the securities from that same company at market rates. They were able to purchase this stock using tax free funds at the current market rate to add to their portfolio as they originally desired.
4. By diverting her dad’s original stock gift directly to the ministry, Barbara saved a lot in taxes!

You want to leave money to St. Luke’s in your will. You also want the flexibility to adjust your will in the event that life circumstances change. You can do both.

In as little as one sentence, you can complete a gift. This type of donation to St. Luke’s helps ensure that the Lord’s work will continue for years to come.

Here is an Example:

Meet Ben and Megan. When they had their first child, they created a will. They included a $50,000 gift to St. Luke’s, their home church. As the family grew to include three children, Ben and Megan decided to revise their gift to ensure their children’s future financial security.

They met with their attorney and revised the gift language so that St. Luke’s received a percentage of their estate instead of a specific amount. Ben and Megan now rest easy knowing their plans will provide for the people and charitable work they love. They have peace of mind knowing that as life changes, they can make additional adjustments as needed.

If you have a loved one who has been impacted by St. Luke’s, making a memorial or tribute gift is a meaningful way to honor them or celebrate a special occasion such as an anniversary.

How It Works

When Melissa’s mother passed away, she knew she wanted to do something that would establish a lasting legacy in her mom’s honor. Because Melissa’s mom was a music teacher at St. Luke’s for many years, Melissa decided to create a Virtual Endowment in her mom’s name called the Karen Schuell Music Fund.

Melissa decided to fund her Virtual Endowment using two methods. First, a gift was given to St. Luke’s in her mother’s name of marketable securities. Second, to ensure the Schuell Music Fund would be fully capitalized, Melissa also left instructions in her Revocable Living Trust to fund any outstanding balance of her VE through her estate. Melissa’s mom’s legacy lives on at St. Luke’s thanks to her gift, and she will also receive a federal income tax charitable deduction (because she itemizes her taxes) and has eliminated capital gains tax on the securities.

When the original purpose for a life insurance policy no longer applies—such as a college fund for grown children or providing financial security for a spouse—your policy can become a powerful and simple way to support God’s work. There are three ways to give life insurance gifts to St. Luke’s:

Name St. Luke’s a beneficiary of the policy. This gift is as simple as updating your beneficiary designation form with the policy holder. You can designate St. Luke’s as the primary beneficiary for a percentage or specific amount. You can also make St. Luke’s the contingent beneficiary so that we will receive the balance of your policy only if your primary beneficiary does not survive you.

Make an outright gift of an existing policy. You can name St. Luke’s as the owner and beneficiary of an existing policy.* You may also qualify for a federal income tax charitable deduction when you itemize on your taxes. If you continue to pay premiums on the policy, each payment is tax deductible as a charitable gift when you itemize. 

Make an outright gift of a new policy. You can take out a new policy and irrevocably name St. Luke’s as the owner and the beneficiary of the insurance contract.*  This method may be particularly attractive for the younger person. Whether you make one single premium payment for the policy or pay annual premiums, each payment is tax deductible as a charitable gift when you itemize your taxes.

*Note: These approaches are especially helpful if you wish to establish a Virtual Endowment but cannot make direct endowment gifts because you are on a fixed income. However, by keeping life insurance premiums current, not only are they likely to be less expensive than an annual VE gift, but you are also assured that your Virtual Endowment goals will be met once the life insurance policy is paid out.

Want to make a big gift to St. Luke’s without touching your bank account? Consider giving real estate. Such a generous gift helps St. Luke’s continue God’s work for years to come. And a gift of real estate also helps you. When you give appreciated property that you have held longer than one year, you qualify for a federal income tax charitable deduction. This most often eliminates capital gains tax. And you no longer have to deal with that property’s maintenance costs, property taxes or insurance.

Another benefit:
You do not have to hassle with selling the property – let St. Luke’s do that instead. You can deed the property directly to St. Luke’s or ask your attorney to add a few sentences into your will or trust agreement.

When you make a gift of real estate, you qualify for a federal income tax charitable deduction equal to the property’s full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property, you also eliminate capital gains tax on its appreciation.

A Real Life Example:

Wendy purchased a rental property years ago and has watched it grow steadily in value. Still active in her career and traveling frequently, she is beginning to find management of the property more and more of a hassle. At this stage of her life, Wendy has decided to move to a 55+ condominium where all exterior maintenance is covered, and she does not have to worry about security issues. She is in a financially stable position. She is beginning to view the rental property as a bit of a burden but does not want to spend the money or time to sell it. Wendy sees this as an opportunity to give her rental property to St. Luke’s because her grandchildren graduated from there. She has also realized the important valuable tax benefits to this type of donation.

Wendy avoids capital gains tax on the appreciation and qualifies for a federal income tax charitable deduction of $250,000, which is for the property’s fair market value. She is able to claim 30 percent of her $200,000 adjusted gross income, or $60,000, in the year of the gift. In the five years following, she can continue to use up the remaining $190,000 deduction.

Wendy is happy in her new condo and loves knowing that the gift of her rental property will make a big difference supporting God’s work at St. Luke’s.

Leaving a real estate gift in your will or living trust:

A gift of real estate through your will or living trust allows you the flexibility to change your mind and the potential to support God’s work with a larger gift than you could during your lifetime. In as little as one sentence or two, you can ensure that your support for St. Luke’s continues after your lifetime.

You can also leave a gift of real estate through a Charitable Remainder Trust (CRT). Speak with our Stewardship office about details. Click below to learn what a CRT is. 

A donor advised fund is like a charitable checking account. It gives you the flexibility to recommend how much and how often money is granted to St. Luke’s and other qualified charities. You can designate an immediate gift or recurring gift or use your fund as a tool for future charitable gifts. Many donors decide to create a DAF through their estate plans to encourage their children to participate in giving decisions. 

You can also create a lasting legacy by naming St. Luke’s the beneficiary of the entire account or a percentage of the fund. With a percentage, you can create a family legacy of giving by naming your loved ones as your successor to continue recommending grants to charitable organizations. We service all DAF’s through the LCMS Foundation (a St. Luke’s partner ministry). Please click here to see how it works in more detail.

A charitable remainder trust provides you or other named individuals income each year for a period not exceeding 20 years. At the end of the trust term (up to 20 years), the balance in the trust can go to St. Luke’s as a gift to ministry.

Each year, a CRT pays a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of each payment is redetermined annually. If the value of the trust increases, so do the payments. If the value decreases, however, so will the payments.

Two Examples of How This Works

As Income for You…

You want to make a gift to St. Luke’s but would also like more income in the future. You create a charitable remainder unitrust (CRT) with annual payments between 5% to 6.5% of the fair market value of the trust assets as revalued annually. Each year the principal is invested by the LCMS Foundation (a St. Luke’s partner ministry). You fund the trust with assets valued at $300,000.

You receive an estimated $25,000 the first year from the CRT. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. You are eligible for a federal income tax charitable deduction for the year you establish the trust. 

At the end of the trust term (up to 20 years), the corpus left in the trust at that time will go to St. Luke’s as a ministry gift. 

As Income for Heirs…

Through our Transfer the Blessings Estate Planning Ministry, you can make similar arrangements as above for your heirs and designated ministries to receive annual payments after your passing. The CRT is funded out of your final estate proceeds. Your heirs and/or designated ministries would receive income every year for the length of the trust term (typically 20 years).

This approach is called a POCRUT (or a pour over charitable remainder unitrust) and is a great way for your estate and heirs to reduce their taxes from inheritance – and possibly pay no income tax at all! 

A POCRUT is almost like ‘giving twice’ because funds are invested over a long period (up to 20 years). You ‘give’ to your heirs each year for the length of the trust. Next, at the end of the trust’s life, any remaining balance is given to God’s work. Your heirs and ministry are both blessed by this long-term strategy. 

*A CGA differs from a CRT based on IRS rules, gift amount deductibility, revocability options, and payout rates. For info about a charitable gift annuity, see below.

In partnership with the LCMS Foundation, St. Luke’s can help you create a charitable gift annuity (CGA) which is a basic contract between you and the LCMS Foundation. In this agreement, arrange to make a gift to St. Luke’s and, in return, you (and/or someone else, if you wish) receive a fixed amount each year for the rest of your life. Minimum investment amount in a CGA is $5,000.

This is a way for you to support St. Luke’s and feel confident that you have a dependable income stream in retirement.
This type of donation gives in two ways. It supplies income, and it provides St. Luke’s with the resources to continue God’s work. We partner together to expand His kingdom! You may also qualify for a series of tax benefits, including a federal income tax charitable deduction when you itemize.

Your payments depend on your age at the time of the donation. If you are younger than 60, we recommend that you learn more about your options by contacting our Stewardship Director, Doug Taylor, at development@sllcs.org or 407-365-3408

CGA Example – How It Works

Michael, 56, and Mary, 55, want to contribute to St. Luke’s but they also want to ensure that they have dependable income during their retirement years. They establish a $50,000 charitable gift annuity through the LCMS Foundation (a St. Luke’s partner ministry).

Based on their age, they will receive a payment rate of between 3.0% and 5.0%* for the remainder of their lives. They are also eligible for a federal income tax deduction when they itemize. Finally, they know that after their lifetimes, the remaining amount will be used to support God’s work at St. Luke’s.

*A CGA differs from a CRT based on IRS rules, gift amount deductibility, revocability options and payout rates. For info about a charitable remainder trust, click below.