Estate Replacement Gift
Albe and Bee Genrus enjoy a comfortable living, and continue to live well within their means. After a thorough review of their estate plan, they realize they will leave a sizable estate, regardless of how their spending might change in the future. They have been faithful members of the parish for many years, were early supporters of the lunch program, saw their children nurtured in faith as they grew, and are now blessed with grandchildren who have started at the church school. In thanksgiving for blessings received and ministry delivered at the corner, they want to see that ministry grow for the next generation.
They bought some stocks for $20,000, which have appreciated nicely over the years. The shares are now worth $150,000. They decide that gifting those shares to Redeemer would be a great mustard seed for expanded ministry. Albe and Bee also like the idea that by gifting the shares, their capital gains inclusion rate is 0%, not 50% ($65,000), and their donation receipt is the full $150,000. However, they are mindful of the expression, ‘charity begins at home’. Can Albe and Bee Genrus make the donation and still leave the estate they desire for their children?
At Albe and Bee’s marginal tax rate, they can expect a tax refund of about $60,000 for their $150,000 gift. Albe and Bee decide to purchase a last to die life insurance policy for $150,000. With this particular policy, they can deposit the entire refund into the premium or side accounts. The single deposit of $60,000 is enough to pay the required premiums to maintain the policy until the last death. At that point, Albe and Bee Genrus’s family receives the $150,000 death benefit without tax and without having probate fees to worry about.
Who benefits? The Genrus’ get to see their donation go to work immediately. They escape the tax on the capital gains if they or their estate sold their shares. Their family benefits because they receive a healthy inheritance when the time comes. Redeemer benefits because they receive a substantial capital gift that allows them to plan for future ministry at the corner.
If this kind of gift is of interest to you, please consult your financial advisors and your family for advice on whether this strategy is applicable to you. If you are interested in proceeding, please contact the Chair of Stewardship, Peter Bennett, to arrange a confidential meeting.
Please click on the following links for additional Stewardship information:
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