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Supporting WELS ministry through your IRA – “We were very pleased”

WELS members Dan and Frieda Carow were moved by the love of Jesus to support gospel ministry. They decided to use their IRA because “there are tax advantages.”

When giving through an IRA, anyone 70.5 or older can make tax-free charitable distributions of up to $100,000 per year. The Carows have enjoyed making multiple gifts to churches, the synod, and other WELS organizations in this way.

If you want to take advantage of this unique way to support the Lord’s work, contact your local WELS Christian giving counselor. Dan and Frieda say, “We were very pleased with the assistance.”

Charity with stability

A charitable gift annuity (CGA) is set up in such a way that you can find joy in supporting WELS ministry while also resting easy thanks to the stability provided by this type of giving instrument:

  • Partially tax-free payments to you or someone you designate during your lifetime
  • Payments for the rest of your life (or, in the case of a two-life CGA, payments continue for the lifetimes of both annuitants), no matter how long
  • Backed by all the assets of WELS Foundation
  • Stable payments, even if investment markets slump
  • A significant income tax charitable deduction on this year’s return

And the process for setting up a CGA is simple. Call your local WELS Christian giving counselor for personalized assistance. A minimum gift amount of $10,000 will start your guaranteed quarterly payments, which you can even have automatically deposited into your bank. At the end of your life, when the Lord takes you to heaven, the remainder of the gift will go to the WELS ministry or ministries that you designate.

What will you leave behind?

Everyone’s life leaves footprints. The Christian follows in the footprints of Christ to impress upon others a strength of character, good works, kindness, compassion, and values. Our positive impressions enhance the lives of our friends and loved ones and direct them to follow in Jesus’ footsteps as well.

Thoughtful estate planning is one means we have to do this. For example, consider the effect of a plan that not only includes provisions for family members, but resources for WELS ministry.

1. An estate gift makes a positive statement.

When you include WELS in the final disposition of your estate, you declare to your family and friends that you believe in and care about the Savior’s mission. Your parting gift becomes a clear declaration of your love for Jesus and his values.

2. An estate gift provides needed funding.

Estate gifts are especially valuable, not only because they tend to be larger than annual gifts, but because they often come at critical times. They provide that extra boost to the ministry plan that can make the difference between program advancement and retrenchment.

Estate gifts can be designated for a specific purpose or they can be unrestricted for use where needed most. They can fund endowments that perpetually provide an ongoing witness to your friends and loved ones that you believe in the work of Christ through WELS.

3. An estate gift encourages imitation.

There’s something about a well-planned estate gift that influences others to “go and do likewise.” As friends and family members plan their own estates, they may be inspired by your Christian generosity and thoughtfulness. Your gift may open up resources from God for WELS through other estates.

If you are interested in supporting your church, synod, or another WELS ministry through your estate plan, see our Christian estate planning guide, then contact a WELS Christian giving counselor for assistance.

Planned giving made easy

Our goal is to share with you and other WELS members the different opportunities available to plan a gift that provides for loved ones and Christ’s work while possibly reducing taxes. That is why we work with WELS Ministry of Christian Giving to distribute informative print materials and provide face to face counsel.

One of the biggest challenges with encouraging planned giving is overcoming the thought that it is complex and difficult. Yes, some giving techniques can be technical. However, your giving counselor will work with WELS Foundation and your own legal/financial advisors to manage the details so that you can simply enjoy seeing your plans arranged and your charitable intentions met. In the end, you’ll discover how easy it is to follow through on your Spirit-led willingness to support the Lord’s work.

Do you wish to make financial arrangements that include a gift for WELS? Contact your local WELS Christian giving counselor to discuss your personal situation in a convenient, comfortable setting. There is no cost or obligation involved.

A new, tax-wise way to support the Lord’s work

As of 2016 anybody 70.5 years or older has a new option for making gifts to the Lord’s work at church, a local WELS-affiliated ministry, and/or a WELS area of ministry: your IRA!

Typically IRA distributions are taxable and, by increasing your taxable income, they may reduce certain tax deductions and personal exemptions you might claim and may increase the tax on your Social Security income or even increase your Medicare premium. But, at the turn of the year, Congress made permanent the opportunity known as the IRA charitable rollover where direct transfers from an IRA to charity are free from federal and potentially state income tax. If you generally do not itemize your deductions, a direct transfer to a WELS ministry may be especially appealing because you will still receive tax benefits for your generosity. If you do not need the required minimum distributions that you receive from your IRA, consider directing those to WELS to save on taxes, then use the cash you would have given to charity for other needs.

Under the new law you and your spouse, assuming he or she is 70.5 years or older and also has an IRA, may each make direct transfers of up to $100,000 per year to charity. Direct transfers to charity are wholly excluded from your taxable income, so they do not have any adverse effect on other tax benefits you might enjoy. These transfers do not generate a charitable deduction, but the relief from tax impact is often more advantageous. Consult your tax or financial advisor to determine the most appropriate gift assets for your situation.

How do I make a direct transfer of IRA assets?

You will need to contact the investment firm that handles your IRA to request a direct transfer to a particular WELS ministry. To ensure that your IRA transfer is not taxable, the check must be made payable to the charity, not to you personally.

You can give to multiple WELS designations by directing your transfer to WELS Foundation. They will distribute funds to the ministries per your instructions. WELS Foundation then provides you with the appropriate acknowledgement for this type of gift.

If interested, talk to your financial planners and your WELS Christian giving counselor to learn more.

Give while you live . . . and later

Some loyal donors have discovered a way to continue supporting the work of Jesus on earth after they have gone to be with him in heaven. They make arrangements now to provide a gift through their will for the benefit of a WELS endowment fund or they can establish a testamentary fund for the benefit of WELS through WELS Foundation that will provide annual gifts in perpetuity.

For example, “Mr. and Mrs. Foresight” have been making annual gifts of $2,000 to WELS for a number of years. In their will they arrange for $50,000 toward an endowment fund. Thereafter, an amount approximately equal to their previous annual gifts will go to WELS each year.

There are other ways to create an endowment fund. For example, the Foresights can make a gift now with appreciated real estate or securities, avoid capital gains, receive a current tax deduction, and receive an income for their lives. Later, after they have been taken to heaven, whatever remains of the gift could be used to establish an endowment fund (provided the remainder is at least $25,000).

If you are interested in learning more about giving to or establishing an endowment fund, contact your local WELS Christian giving counselor. He can help you explore the possibilities and benefits.

A gift annuity that’s right for you

Have you heard about the charitable gift annuity? When you donate at least $10,000 in cash or securities to WELS Foundation, you or a loved one will receive annuity payments for the rest of your life. Your payment rate is based on your age and a portion of your payment may even be tax-free. The most basic form is called an immediate payment gift annuity because it begins paying you income right away.

Donors like this gift vehicle because it allows them to give a thank offering to the Lord while guaranteeing them payments they can use for various needs. The payments come at the same time, and the amount never changes. There is also an immediate income tax charitable deduction for donors who itemize their tax returns.

Besides the immediate payment gift annuity, there are a couple of other setups. Gift annuities can have delayed start dates. You can establish one now and defer the payments for 10 years or however long you wish. The longer you delay payments, the higher the payments will be. This is because the money you contributed is invested prudently and compounds tax-free until the payments begin.

Another type of deferred gift annuity is called “flexible” because you can establish the annuity now and determine later when you want the payments to begin (for example, when you decide to retire or if a medical need arises).

If interested, learn more, then contact your local WELS Christian giving counselor for assistance in setting one up. He can also provide your with personalized examples of how the various gift annuities work in your situation.

Congress extends provision for tax-free gifts to charity from IRA

For those aged 70½ or older, it is once again possible to make a tax free gift directly from your IRA to any WELS ministry.

On December 18, 2015 Congress passed legislation to extend the IRA charitable rollover for 2015 and beyond. Up to $100,000 per year can be transferred directly from an IRA to one or more qualified charities free from federal and potentially state income tax.

A WELS member can take advantage of this tax benefit by directing their annual required IRA minimum distribution directly to WELS Foundation. WELS Foundation will then distribute their gift per the donor’s instruction to any WELS ministry including their local congregation, WELS missions, or schools. (For a complete listing refer to the WELS Yearbook.) We encourage donors to speak with their tax and financial professionals before requesting a qualified charitable distribution from their IRA.

WELS Foundation is the foundation of choice for WELS members and ministries. For more information on how you can make this tax wise gift to any WELS ministry contact your WELS Christian giving counselor, mission advancement representative, or WELS Foundation (800-752-8940).

Reviewing Your Estate Plan

Once a person signs a will and tucks it away for safekeeping, the old saying come to life: “Out of sight; out of mind.” On one hand, it is good to be relieved of the worry of intestacy (dying without a will). On the other hand, things change and a will that becomes outdated can cause problems.

That is why it is a good idea to review your will every few years, particularly when there have been changes that may affect your plans. It just takes a few moments, but the practice can spare your loved ones some heartaches down the road and ensure that your Christian stewardship goals are properly carried out. (One tip: If it’s inconvenient to access the original will, make a copy to keep handy for easy reference.)

One reason for reviewing your will is change in the status of your dependents. Has God blessed your family with a new child? Or, if you no longer have dependent children, you may want to revise any custodial trusts created by the will.

Has there been a death in the family? A redistribution of assets may be in order. Does an adult child need more assistance than your other children? Again, a revised will might be in order.

Another reason to review is if there have been changes to the tax laws.

Changes in your finances, health, or family are important considerations. Charitable giving priorities may also change. If your children are doing well on their own, you may want to increase your bequest to your favorite charities. You can double-check that your arrangement utilizes your assets in a way that is most advantageous for your family and for charity.

Wills and other estate planning documents are only as good as the degree they reflect your current needs and priorities. It’s also important to make sure they coordinate with beneficiary designations and payable/transfer on death statements, and that they testify to your faith in Jesus our Lord. So take the time to read them over occasionally. Talk about these things with your family. Give yourself the satisfaction of knowing that your house is in order.

If you want assistance reviewing your documents or if you have never prepared a will, now is the time to care for this important matter. We have a free workbook that takes you through the steps of preparing a Christian estate plan. We can also provide assistance through a WELS Christian giving counselor and suggest a competent estate planning attorney to finalize the process.

Keep Giving After You’re in Heaven

If you have made regular direct gifts to WELS over the years,  you are helping to provide a continuing source of stability. WELS depends on annual gifts to carry out out its various ministries year after year, and we appreciate the Christian generosity of faithful donors.

Did you know it is possible to continue providing annual gifts to WELS long after you have gone to heaven? You can do this by giving to one of the WELS endowment funds—or you can establish your own endowment fund for the benefit of a WELS ministry through WELS Foundation.

Here’s how it works. Whatever amount you donate provides distributions of four percent of the three year rolling average of the fund to the designated ministry every year until the Lord returns. For example, a one-time gift of $25,000 (the minimum needed to start an endowment) would provide an estimated $1,000 every year. Larger amounts, of course, will provide higher annual gifts. You can give now and/or later through your estate plan.

If interested in making a planned gift to a WELS endowment fund or starting your own, contact your local WELS Christian giving counselor.

Q&A: year-end giving

Q: We have included WELS in our will. However, we are interested in making donations now. Is there any advantage to giving an offering to WELS this year?
A: Absolutely. If you itemize your deductions, you are not liable for taxes on donations to charitable organizations. A gift will produce tax savings proportionate to your situation. When you remember a charity in your will, you do not receive income tax benefits. Also, money donated now goes immediately to ministry and, if inflation is considered, will have more buying power.

Q: I do not itemize my deductions on my income tax forms. Is there any way to make a sizeable contribution to WELS and reap some tax savings?
A: Yes. By donating appreciated assets (stocks, bonds, mutual funds) you can make a larger gift for the same cost as giving cash. This is because you avoid the capital gains tax. Meanwhile, WELS receives the full value of the assets. If you’ve taken on loss on your securities, you can give the cash generated by the sale and often benefit from deducting all or a portion of the loss.

Q: At this time of year, I am flooded with appeals for outright gifts. Why is this?
A: One reason may be that the Lord has prompted you to support a wide variety of ministries over the years. Those ministries realize that, like many people, you may assess your yearly charitable giving in November to be sure you have made that year’s gifts. They simply want to gratefully illustrate the impact of your previous support and ask you to consider a special gift at this time.

Q: What should I keep in mind regarding my year-end gifts?
A: To take advantage of 2015 tax savings, gifts must be postmarked by December 31. You may want to consider a year-end gift if you received a year-end bonus or other unexpected income. Remember to reflect on the fulfillment of God’s promise to send his Son Jesus to be our Savior, as well as the blessings of the past year and how gracious God has been.

For assistance with a year-end gift, contact your local WELS Christian giving counselor.

One way to do the Lord’s work into the future

CGA illustration 350x263

Charitable gift annuity illustration

Reuben Hoppe, 92, and his wife Arline, 87, just established their second charitable gift annuity (CGA)—and they gave their adult children a portion of their inheritance early so that they, too, could establish CGAs. When asked why they chose to support gospel ministry through CGAs, they said, “We feel so blessed and know where the blessings come from. This is one way we can do the Lord’s work into the future.”

A charitable gift annuity allows you to support ministry and provide for yourself or your loved ones with fixed annuity payments for life. Consider this sample single life annuity illustration for someone who is 75 years old (rates vary based on age). You can receive your own personalized CGA illustration using WELS Foundation’s Gift Guide.

If interested in more information and gift help by a WELS Christian giving counselor, call WELS Ministry of Christian Giving at 800-827-5482.

More blessed to give than to receive

Have you ever purchased and wrapped the “perfect” gift for your spouse or close friend and watched with excitement as the person tore away the paper? You knew the gift would be a hit, and you could hardly stand it as the anticipation grew.

Then the magic moment came as the box was opened. You delighted in the expression of surprise and joy. You beamed as words of gratitude filled the air. Even though you were not the receiver, you had great fun giving the gift because you knew it was just what the person needed and wanted.

A well-planned charitable gift can bring happiness as well. It starts from a heart thankful for God’s generous spiritual and earthly blessings in Jesus Christ. When you take the time to discover what the needs are and how you can structure your gift to do the most good, you find yourself anticipating the actual gift. You trust it will be a blessing.

The size of the gift is not the most enjoyable part. Our Lord reminds us, “If the willingness is there, the gift is acceptable according to what one has, not according to what one does not have” (2 Corinthians 8:12). A gift that matches a specific need and accomplishes something worthwhile can be enormously rewarding. For example, an endowment contribution that provides ongoing support for generations to come can elicit a mile-wide smile from everyone concerned.

We enjoy helping donors plan cheerful gifts. We even have a free booklet that shows various ways you can make these gifts. Contact your local WELS Christian giving counselor to request this booklet or assistance. Let us help you make the perfect gift for WELS and for you.

A gift that also pays you

What if you could make a charitable gift toward the Lord’s work that would also provide you and/or a loved one with fixed annuity payments for life?

You can! The charitable gift annuity allows those 60 and older to make a gift of cash or securities (stocks, bonds, mutual funds) in exchange for fixed quarterly payments. After you go to heaven, the residual of the gift will be used by your congregation, synod, or another WELS affiliated ministry. The following example illustrates the benefits of a single-life annuity (two-life annuities are also available). It is based on:

  • a gift of $10,000 (minimum) in cash
  • a payment rate of 5.8 percent for someone who is 75 years old (rates vary based on age)

You may claim a charitable income tax deduction of $4,577 and receive quarterly payments totaling $580 each year for the rest of your life. And $437 of the payments you receive each year will be tax-free during the first 12.4 years. Best of all, after you are taken to heaven, the remainder value of your gift annuity would go to the ministry of your choice!

Many people appreciate the charitable gift annuity for this reason. They benefit from receiving payments while serving their Savior by helping to train pastors and teachers, open missions across the world, and support congregations and schools.

If you are interested, call 800-827-5482 for more information and assistance from a WELS Christian giving counselor.

What are you waiting for?

Two things are certain and one nearly so. The two, as you already know, are death and taxes. The third is procrastination. It is almost as predictable as the grave.

For some reason, many people wait years to complete their estate plans. Most of these people wait too long. They die and leave behind a mess that others have to sort through and solve.

Because so many people procrastinate in this area, the states have adopted rules to determine what happens to a deceased person’s estate. The court appoints a lawyer to carry out these rules and to resolve liabilities and distribute assets accordingly.

Unfortunately, the rules are generic and don’t take into account the wishes of the deceased. A parent who dies without a will and leaves a minor child behind has missed his or her opportunity to name a trusted, Christian guardian. Not only will the child’s support system be in doubt until a decision is made, you can’t be sure that your child will receive the kind of spiritual nurturing that you would have wanted them to have.

A Christian estate plan can include a preamble—an introductory message sharing your faith in Christ for salvation. This is an opportunity to reassure and influence family members that unfortunately is missed without a Christian estate plan.

Another example is the person who dies without leaving philanthropic instructions in a will or other estate planning document. Money that might otherwise go to the Lord’s work and other charities supported by the person during life are disbursed according to “the rules.”

The court overseeing the probate process may be unaware of the concerns and priorities of the deceased. Consequently, relationships with family members and final decisions may not be consistent with the ideals and wishes of the deceased. The whole process of finalizing probate and dealing with all the loose ends can be frustrating and even difficult for loved ones, especially during the period of grieving.

These reasons and more prompt us to encourage all our supporters and friends to take care of their estate planning responsibilities. We have seen the heartache and complications when a person dies without an estate plan. We have also seen how smoothly things go when proper planning has been done in advance.

To assist you in this process, we offer a free booklet titled, “Estate Planning for the Christian Steward.” The booklet will help you prepare for meetings with a WELS Christian giving counselor and an estate planning attorney, and the process could save you legal fees.

If you prefer a free hardcopy of the booklet or want free assistance with your estate plan by a WELS Christian giving counselor, call WELS Ministry of Christian Giving at 800-827-5482.

Visualize endowment

Before the summer months arrive, outdoor enthusiasts will sometimes end their correspondence with “Think Sun” or, perhaps, “Visualize the Sun.” Sometimes they even sport bumper stickers with the same message. The idea is to put people into a mood of expectation, and they will begin to plan for the future accordingly.

We also like to think expectantly, but instead of sun, we “Think Endow.” We relish the thought of building up our WELS endowment funds or helping donors, churches, and other WELS organizations start new ones to build a solid financial base for future ministry.

Here are five words to help you also “Think Endow.” Each one begins with a letter from “Endow.”

The “E” stands for Enduring. This is one of the key features of these funds—they last for generations. The monies are kept separate from other funds and invested in a manner to create both growth as well as funds for annual distributions. Endowments form an enduring, dependable source of revenue that provides reliability and confidence.

“N” refers to Need. While WELS benefits from regular annual giving to meet operational expenses, we also want to increase our endowment pool to effectively face future uncertainties and opportunities. The more income provided through endowments, the more support we have for fulfilling our Christian mission far into the future.

“D” means Doable. Some shy away from endowments because they consider themselves financially incapable of creating one. And some steer clear because it all seems so complicated. Both concerns are unwarranted. Actually, most anyone can give to an existing endowment or create a new one through careful planning. A gift to an endowment can be made today or through a distribution from your estate when the Lord calls you home. Doing so is easier than people expect.

“O” stands for Ovation. Because endowments play an important role in supporting ministry, we can’t express enough how appreciative we are to the Lord and to those who establish or add to one of these funds. Surely future generations would also applaud as they benefit from endowments established today.

The “W” refers to Witness. Every existing or new endowment supports our witness of Christ to the world. An endowment also bears witness to the persons behind the endowment as those who believe in the Christian mission of our church body. Such testimony has an impact on others, and encourages support for WELS.

Are you beginning to “Think Endow?” If so, we can provide you with free information about supporting WELS ministry through an existing endowment or by creating a new donor designated or congregational/organizational endowment through WELS Foundation.

Call us at 800-827-5482 for a free brochure or to be put in touch with your local WELS Christian Giving Counselor who can help you with the details.

Livin’ in the house we’ve given

“Bill” and “Shirley,” compelled by the love of Christ, are generous givers to the church, yet for years they thought about doing something extraordinary. Acting on the advice of their attorney, 10 years ago they took that step by setting up a provision in their revocable living trust to give their house to their church and synod when the survivor passes away.

Meeting with their attorney to update their trust, he suggested that they think about taking advantage of the current tax code by giving the house to now and continuing to live in it. He explained how it works:

They could deed their personal residence to WELS Foundation using a retained life estate agreement. That agreement reserves the right for Bill and Shirley to use the property for the rest of their lives, called a life tenancy. Bill and Shirley will still be responsible for maintenance and repairs, to maintain insurance coverage, and pay property taxes. When the life tenant passes away, WELS Foundation takes possession to finalize the gift and then can sell the house and distribute the funding to the ministries designated by the donors.

The attorney explained that the process was straight-forward. They would get an appraisal on the property to determine its current market value. Their joint life expectancy and other factors are considered to determine the present value of the remainder interest given to WELS Foundation. This amount is the value of the gift that Bill and Shirley can claim as an income tax charitable deduction.

Bill and Shirley were thrilled that, through this arrangement, they would be able to make a significant offering to Jesus and his church at life’s end.

If a retained life estate arrangement sounds like something you’d want to investigate, or if you are considering any gift of real estate, call your local WELS Christian giving counselor at 800-827-5482.