Current Events







Helpful Links

IRS Downloads

January Newsletter 2011

Newsletter Archives

Planned Giving Mentor

Of Counsel: Winton C. Smith, Jr., JD

Quote for today: Giving frees us from the familiar territory of our own needs by opening our mind to the unexplained worlds occupied by the needs of others. Barbara Bush


On the To-Do List - 65% of American adults have not written a will (source:

Comment and Thoughtful Options: Is it any wonder bequest are always the greatest support option for estate. Individuals of all ages are your target audience. Unfortunately I have not see statistics on those over age 65 not having a will or living trust but I would think it would be much lower especially if they have significant assets.

Can you list five (5) ways in which you promoted bequests in the last year? Do you have a letterhead that mentions wills and trusts and an opportunity to support your charity. Do you promote contingent bequests of life insurance, pension plan, profit sharing plans, IRAs, 403b plans? Do you do a will seminar at your board meetings? Do you stuff flyers on wills and bequests offering booklets on planning in your thank-you letters? Do you provide your web site link on all publications? Have you conducted a basic wills and trusts seminar in the last year? What would you do if someone asked your charity to pay for the drafting of their will to leave everything to your charity? Do you have basic will and trust brochures to share with probable donors? Can you estimate the present or future value of all the bequest intentions you have confirmed?


Giving 2.0: Transform Your Giving and Our Laura Arrillaga-Andreessen is a book worth your reading. She teaches Strategic Philanthropy at Stanford University. Check her out on YouTube it will change your thinking about your program and your donors.

Available for your Kindle at for $9.99. Makes a great gift for your donors.


Social Security and Planned Gifts.....McLeod Health Foundation is offering a Financial Planning Seminar sponsored by their Professional Advisory Council and offered twice during April 4th. It will feature Social Security and Planned Gifts. The objective is to draw a large audience with a national speaker and offer insights into a program everyone has.

A discussion of planned gift strategies to increase income and reduce taxes will complement the topic of good charitable planning. Note: the seminar flyer drives responses to the planned giving web site and all email, phone contact information is supplied.


Georgetown Bequests Intentions.....Georgetown University recently added bequest information and intentions to their online donation page. If your donors are increasing using Online Giving consider adding a reminder about future gifts. Link to Georgetown page.


Planning Calendar for 2012.....I have added under Articles a Excel spreadsheet planning calendar for planned gift activities. Feel free to download and modify to fit your needs. It tracks activities and also the quarterly and yearly results for planned gift activities.

Feel free to share your planning calendar with me and I will post for others to benefit.


New Gift Annuity Rates Effective January 1, 2012.....The American Council on Gift Annuities has announced new gift annuity rates for 2012. This is the result of the decreasing return on the fixed income bond component of the ACGA investment return assumption. Handouts from both the Sharpe Group and Crescendo further explain the rational for change.

If you would like a laminated rate chart for the 2012 rates simply request one using the following E-mail request.


Where are Your Confirmations Forms Buried....I look at many planned gift web sites and was impressed with how easy the forms were identified on the Adler Guild Society web page their PG recognition group. Morton Plant Mease Foundation, Clearwater, FL. Marty Matula, CFRE, CFP, Executive Director has created an easy to use and identify button link to their confirmation forms. Check it out at this link.


Prepare Now For Sharply Rising Tax Rates.....Affluent investors are likely to face double- and even triple-digit increases in tax rates in 2013, but a new white paper offers tips on planning for this eventuality.

Andrew Friedman, a principal in the Washington Update, which focuses on the impact of public policy on the financial services industry, has previously warned that sharp tax hikes are all but certain in less than a year. No matter the political complexion of the next Congress and regardless of whether President Barack Obama is reelected, it is he and the current divided Congress who will preside over the lame-duck post-election legislative session dealing with the expiration of Bush-era tax cuts.

Whether the president feels newly empowered because of his re-election or stands on his previous pledges despite defeat, he is likely to veto any measure renewing tax cuts for affluent Americans; Congressional Republicans in the House will face the choice of compromising on a bill that renews the tax cuts for the less affluent or to see the entire measure expire.

At the same time, new taxes enacted with the president’s signature healthcare law take effect next year, so that families with incomes above $250,000 will pay an additional 3.8 percent tax on investment income.

The result of these combined tax increases, according to the white paper by Friedman, will be a tax rate on dividends rising from 15 percent to 43.4 percent for an increase of almost 300 percent. He calculates the top tax rate on capital gains would rise from 15 percent to 23.8 percent–an increase of nearly 60 percent; the estate tax would rise 55 percent as the tax rate rises and the old exemption amount is restored; and the top rate on ordinary income will rise from 35 percent to 43.4 percent, which amounts to an increase of almost 25 percent.

The Washington Update white paper details eight strategies investors can employ in this rising tax environment.

The first idea–and one with ominous implications for stock market performance this year–is to sell assets while the tax on capital gains is just 15 percent. Friedman cites a recent study that found that “if asset values grow by 4 percent per year and the capital gains rate increases as scheduled from 15 percent to 23.8 percent, an investor will have to hold assets for an additional 15 years to be better off than he would be had he sold the assets initially and paid tax at the lower rate.”

The white paper also recommends receiving ordinary income this year rather than next. “For instance, executives could consider exercising non-qualified stock options this year so that the resulting income is taxed at prevailing rates,” Friedman writes.

Conversely, the value of deductible expenses–such as charitable contributions–will rise in the higher-rate environment and should therefore be deferred. Similarly, the attractiveness of municipal bonds will rise since the tax-equivalent yield on the same bond (all else being equal) will be higher in 2013 than in 2012.

Friedman suggests that tax-loss harvesting and buy-and-hold investing both become more compelling strategies in a high-tax environment, as do investments managed to enhance after-tax returns through reduced turnover, deferred gains, hedging techniques and the like.

The white paper recommends consideration of life insurance and annuities whose tax-deferral features become more attractive when taxes rise. (Friedman notes that annuity death benefits, unlike life insurance payouts, are subject to income tax, though a beneficiary may “stretch” payments over the course of his life.) Friedman also recommends conversions of traditional IRAs to Roth IRAs and details at length the applicable rules.


News and Notes....

LIFE AT THE TOP - The top marginal tax bracket on a joint return has changed 18 times (either up or down) since 1950. The most recent change was in 2003 when the top rate was reduced to 35% (source: Internal Revenue Service).

TAXES - A couple filing a joint tax return for 2012 income will reach the highest federal marginal tax rate of 35% at $388,350 of taxable income. 10 years ago (2002), a couple filing jointly reached the highest federal marginal tax rate of 38.6% at $307,050 of taxable income (source: IRS).

ENOUGH? - The maximum Social Security retirement benefit that could be earned by an individual reaching full retirement age in the year 2012 (i.e., at age 66) is $2,513 a month (source: SS Administration).

GETTING OLDER - 13.5% of the US population is at least age 65 today. That percentage is forecasted to rise to 16.2% in just 8 years (2020) and to 20.4% by the year 2040 (source: Census Bureau).

COULD YOU LIVE ON THAT? - 46.4% of the individual income tax returns filed in the USA for tax year 2009 reported less than $30,000 of adjusted gross income (source: Internal Revenue Service).



Kudos Corner

In this section I periodically highlight some recent gift expectancies and gift program elements I think will be helpful and informative, not all gifts are included.

Kudos to the McLeod Foundation, Florence, SC for adding 5 new members of the Dr. F.H. McLeod Legacy Society their planned gift recognition group at the January member celebration. Total membership has risen to 56 active members who have remembered the Foundation in their estate plan.


James E. Connell and Associates is a national consulting service devoted to increasing resources for charities using the power of charitable estate and gift planning techniques.

Pinehurst office: PO Box 3335, Pinehurst, NC 28374
Phone: 910-295-6800

Northeast office: 20982 Bayside Avenue, Rock Hall, MD 21661

To unsubscribe from this newsletter click this link and in the title line put unsubscribe