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Ladies of Charity Explore Estate Planning

Posted on February 13, 2019 by Alice Kenny  |  Share

Check Out These Simple Steps Everyone Can Follow

Snacking on salmon tea sandwiches and freshly baked cookies, 40 women, nearly all Ladies of Charity members whose motto is “making a difference”, along with several men hunkered down last week on the top floor of the New York Catholic Center to focus on planned giving.

Dressed in wool skirts, slacks and sweaters and speaking in broad New York accents they came from varied backgrounds, some former housewives, others executives and retirees.  Most are lay ministers and lectors in their local churches; most are now friends who have known one another for years.  What holds them together, they said, was their commitment to the church and to using what extra they have to helping New York’s neediest.

So on this special day in the wide-planked Dillon Room they gathered to learn about estate planning, an intimidating name for ensuring their goal to help others through Catholic Charities NY continues as they grow old and when they are gone.

“My husband & I adopted a child from the Catholic Guardian Society (a Catholic Charities NY affiliate), a little girl who will be 39 this year,” said Catholic Charities trustee Kathleen Cudahy, “and that was the start of a long relationship.”

Ladies of Charity NY  members provide practical and spiritual support to those facing life’s challenges: illness, isolation and unmet immediate needs through member and volunteer efforts and donor generosity.  This includes a Layette Ministry for expectant mothers, Gifts of Comfort for the elderly and homebound and the Ask Program that provides seniors with advise and help using new technology.

“Don’t let the tail wag the dog,” said Sarah B. Rebosa, the event’s guest speaker and partner at Cullen and Dykman LLP specializing in complex estate and tax planning she said. 

New income tax laws change standard deductions, tax exemptions and who can lower their taxes through charitable deductions because they still need to itemize, she told the group. But we plan our charitable donations mainly for nontax reasons, because we want to give to a specific charity, and less because of concern about income and estate taxes when we are no longer alive.

Benefiting charities, she continued, can be accomplished through a range of strategies.

“There are ways for people with bequests of $5000 to one million dollars…so we’re taking millions off the table,” she said to appreciative laughter.

“We help everyone who comes through our doors,” said Catholic Charities Community Services Executive Director Beatriz Dias Taveras.

Simply put, Ms. Rebosa continued, people can provide for charitable giving in their wills, trusts and estates by:

  • Writing a check and sending it the charity
  • Making a Charitable Gift Annuity
    • This is popular for charitable gifts ranging between $5,000 and $100,000.Benefits include: designating the charity of choice, ease of use, qualifying for a partial income tax deduction and retaining an annuity stream.
    • Disadvantages include: interest rates could rise after annuities are finalized lessoning the potential income stream; those who die young will receive less annuity back and when the annuity period ends there are no funds left in it.
  • Making a Qualified Charitable Distribution  
    • This, Ms. Rebosa says, “is the best hidden secret of estate planning.”It allows those 70 1/2 and older who are required to take a taxable distribution from their IRAs to instead give the distribution directly from the IRA to a qualified charity, avoiding income tax on the distribution.
  • Directing remaining IRAs to qualified charities after death while directing nontaxable portions of an estate to relatives and other beneficiaries named in a will. 
    • This enables those beneficiaries to avoid paying taxes on the deceased person’s IRA.

“I better talk to a lawyer,” someone commented at this point, bringing on nods and chuckles among the audience.

There are also

  • Community Trust Funds that allow people to create a fund in their name, designate a specific charity and advise how the fund will be used. 
    • “This is a great way to create a foundation at a much lower asset level,” Ms. Rebosa said.
  • Pledge agreements: These are basically IOU’s; ‘I promise to pay x charity $x for x years to fund x cause.’
    • This is a way to commit, retain some control and let a charity know the funds are coming.
    • It’s a win-win for both sides,” Ms. Rebosa said, “because it gives you time to pay out and clues the charity into what how much you are committing for the future.”

“The bottom line is to figure out why you want to plan; who you want to plan for and then pick the technique that best accomplishes your goal.” Ms. Rebosa said.  “And document everything,” she added. “I’ve seen litigation for small and big estates. I’ve even seen litigation over who gets mom’s bathrobe.”

“The heart of our work is our ministries,” said Ladies of Charity President Mary Buckley Teatum. “We’re fortunate to have a wonderful relationship with Catholic Charities & we’re always looking for new members.”

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