I’ve read the newspaper and seen the news way too much this past week. The words “hot mess” come to mind. It’s depressing. There’s just so much of the negative getting ink in the paper and filling our airwaves these days. I had to take a time out and go see Despicable Me 2 just to get a break from reality…and several really good laughs!
Believe it or not, we actually think about the headlines we see quite a bit. Why? Because we have the antidote here at the Community Foundation…that’s positive news. You can’t work with extremely generous people and give grants and scholarships to awesomely deserving people without feeling good about it. It’s simply not possible.
And each time grants and scholarships are distributed, there’s a good story. Several students have gone to college to become the first college graduates in their families. Once we fixed the air conditioning unit for the folks at the Senior Center…boy were they grateful for that! We’ve bought shoes for kids and food for those in Grant County that need to visit our local food pantries. We’ve even provided supplies for our furry friends in need.
See what I mean, there’s just one good heartfelt story after another. But, we don’t have a bottomless pot ‘o gold…though that admittedly would be way cool. We rely on donors to contribute donations both during their lifetimes and even after their death through their wills and estates.
Even if you’re a Duck Dynasty kind of guy living in a Kim Kardashian world, you can still give loyally throughout your life and experience the impact of that generosity. You could get to meet the first time college graduate or facilitate the work of a charity you’ve appreciated for years. It’s incredibly cool to see the impact made because of the choice you made to give…no matter what the amount.
Yet you can’t underestimate giving through bequests…hopefully. I was just reading a sad article about the shocking death of James Gandolfini. Most of you know Gandolfini as mob boss Tony Soprano from the hit series The Sopranos. He died from a heart attack last month at the young age of 51with $70 Million in his estate. Yes, that was a 7 and a 0 together…70 million! But, shockingly, approximately $30 Million of that will go to the government via the death tax. While I’m sure the government will be happy to accept the check for $30 Million from the Gandolfini estate, it’s probably not what the actor had in mind.
So, the question is…how can one avoid paying an outrageous death tax? Here are a few ideas:
1. Give up to $13,000 annually to your heirs…gift tax only applies if it’s over $13,000.
2. Pay for higher education or medical expenses for your heirs…again not-taxable.
3. Invest in insurance…policies typically cover any estate tax so they won’t have to be paid later. You can even name a charity as the beneficiary of a life insurance policy.
4. Set up trust for your heirs now and bequeath the trust rather than money.
5. Bequeath money to charity…my personal favorite. Charitable contributions are tax-deductible expenses and can lower or even negate estate taxes.
So, definitely consult an expert and be the boss of your own estate. It’s the only way to make sure that the people and charities you love get the bada-ching that you intend. When it comes to the government taking up to 50% of your hard-earned money, Fuhgeddaboudit.