St. James’ is launching a program of planned giving to provide an opportunity for parishioners to support the long-term ministry and mission for their church. This program includes a number of ways for parishioners to benefit their church in the distribution of their assets, and even to provide for themselves a source of additional income in their senior years.
As we begin this program, the following information may be helpful. Please let us know if you have other questions whose answers would be helpful to you and to others.
Q. What is a planned gift?
A. A planned gift is part of estate planning. It may be given either during one’s lifetime or as part of one’s estate to support an institution and its program. It may be in such forms as cash or other assets, an annuity one purchases, or a life insurance policy or retirement account that names the institution as beneficiary.
Q. Who can participate in the planned giving program?
A. Any individual person or couple who may want to continue to support their church in this long-term manner. Age is not important; commitments are welcome from young persons, middlers, and seniors.
Q. What would St. James’ do with my planned gift?
A. Most planned gifts to churches are used for endowment or another major purpose, and not for general operating costs. At St. James’ we have a General Endowment Fund, whose income is to be used at the discretion of the vestry while the principal remains intact. We also have the Eifler Fund, whose income is used each year in support of several specific areas of parish operation in which Robert Eifler was especially interested.
In addition, we have two quasi-endowment funds, from which both principal and interest may be spent for the intended purposes: the Building Fund (for eventual construction of our connecting building between the church and parish hall, and then other capital improvements), and the Missions Fund (for local, national and international mission work).
A gift of $25,000 or more, or action of the vestry, may establish other special funds in the future as well. Feel free to ask about all of these funds in your meeting with a church representative.
Q. Does a planned gift have a minimum financial level?
A. No. Gifts in all amounts are welcome and valuable.
Q. When making a bequest, do we have to specify a dollar amount in our wills?
A. No. You have several choices: a specific dollar amount, a percent of your estate, or what is left in your estate after other bequests are fulfilled. Another possibility is to leave insurance or retirement proceeds, as mentioned below. This provides great flexibility.
Q. How does life insurance work as a planned gift?
A. Life insurance policies that are paid up can be given to the parish. A new or existing policy can also list the church as beneficiary, and each year the donor gives the church the funds needed to pay the premium.
Q. Are retirement policies a good planned gift?
A. Yes, they can be. Your pre-tax IRA or 401-K, or a portion thereof, can pass to the church without any taxation, whereas it would be taxed at income tax rate and assessed any applicable estate taxes, too, if left to a family member or friend. It is generally advantageous to use any pre-tax accounts first in making a planned gift, and leave assets already taxed to your individual beneficiaries. Check with your policy carrier for methods to declare the church as a beneficiary.
Q. These strategies all seem to apply to ways my gift can be made as part of my final affairs. Can a planned gift be made to the church during my lifetime?
A. Yes and many are. Sometimes personal circumstances are such that an immediate gift is appropriate, providing tax benefits and other advantages. For senior citizens, a gift annuity provides an income to the donor for added income during his or her lifetime, as well as a tax deduction, and a final benefit to the church when those payments end. There are also other more complex vehicles available to those with major gifts in mind.
Q. Should I be doing other work to arrange my personal affairs?
A. We recommend that everyone, regardless of age, complete basic legal documents: a will or trust, medical directive, and durable power of attorney. These can easily be drafted by an attorney who works in the area of family practice. Young families have the responsibility of providing care plans for their minor children should they be unable to do so themselves. Persons of all ages begin to acquire assets; without a will or trust, those assets will be distributed according to state law without consideration of the wishes of the deceased owner, and with no benefit of tax advantaged planning.
Q. What about financial planning?
A. We also recommend that everyone have guidance for managing their financial assets. It is best to begin this task as early as possible, but it is never too late! A financial planner or a broker can help you evaluate your resources and advise you regarding wise management of them to meet your needs and for protection over your lifetime.
Q. Besides legal documents and financial planning, is there other desirable planning to do?
A. Your rector strongly encourages you to provide her with written guidelines for your final services. This is a task commonly left to family, to do at a time of emotional stress. It is very considerate to avoid this burden for them by providing your written instructions, which will be kept in the rector’s personal files until needed. A booklet for your use is available from the church office. One never knows when this will be needed, so it should be a priority responsibility.
Q. What happens if I want to change my planned gift arrangements?
A. Many planned gift strategies can be changed during the remaining years of your life to reflect changes in your life. Often a donor is able to increase a planned gift as a result of favorable economic conditions, changes in the family, life span of the donor, memorial opportunities for loved ones, and new inspiring opportunities at the church. Adverse conditions may also call for changes, of course. A gift annuity, however, is fixed once it is established and payments begin to the donor.
Q. How would I begin to consider a planned gift?
A. You may call the church office and ask to be contacted by someone who can answer your questions. The church has a wonderful packet of information to help you with planning, and some newsletters describing some of the ways to make a gift which can be passed on to you.
Q. Can you help me learn what would be best for me among the different kinds of planned gifts?
A. We can ask for examples of various planned gifts from the Episcopal Church Foundation, based on your date of birth. The Foundation helps parishes throughout the country with this work. Their examples can provide a clear picture of options for you.
Please take the first step and contact the parish office (301-762-8040). You will be contacted promptly by a representative of the church who can answer your questions and guide you in this important process. Deciding to include the church in your planned gifts will be a great benefit to St. James’ to strengthen its future ministry and mission.