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Quote for today: Wealth is not to feed our egos, but to feed the hungry and to help people help themselves. Andrew Carnegie

Practice the Four P's.......
We have a key opportunity with each donor visit. Competition for charitable support is fierce and at times we need to emphasize our charities mission. Donor retention is key to long term success for planned gift programs. In your donor visits explain how you will help your donors with the four P's.

The Potential of their assets. The Protection of their assets. The Payout of their assets, and the Preservation of their assets. These are the four P's.

Assets increase and decrease in value and donors reexamine the value of assets as they go through life's stages. How donor's view assets will be different in the accumulation stage from the conservation and distribution stages of their financial life. As donors age we have an opportunity to show them the value of planned gift strategies and their potential for future and/or current support.

The recent economic crisis has shown a new light on the protection of donor assets. As asset values have changed, mostly decreased, donor have reexamined their tolerances for risk and their savings and investment time horizons.

Once a sufficient critical mass of assets have been accumulated donors shift into looking at how the payout from the assets can be used to support lifestyle during their retirement and senior years. It is no wonder the power of a gift annuity agreement to not only increase the payout from assets but to decrease taxes (providing a donor itemizes their taxes) has made gift annuities the number one charitable life income arrangement in America.

Donors who wish to control all assets during life can use various bequest arrangements to preserve assets during life but provide for a charitable distribution at death. Bequests should be the bedrock of all planned gift programs. Life insurance arrangements and the use of speciality trusts can assist donors who wish to plan both their charitable support and preservation of assets for family.

Start your next visit thinking about how you will implement your 4P discussion with your prospects and I think you will begin to build a long term relationship with your donors.


Move in Sooner.......Money magazine (March, 2009) reports the average entrance age into continuing-care retirement communities (CCRC) is 79. An excellent target age for gift annuity programs for real estate gifts. The idea for most individuals is to move while they are still healthy to take advantage of all the activities and facilities a typical CCRC can offer. These individuals have chosen how they are going to spend the rest of their years and this is an excellent time to suggest they examine and reevaluate their estate and charitable plans.

A gift annuity is an excellent program for these folks to help them with the monthly fees during their retirement.


Retirement Postponed.......A pool conducted at asked 81,000 folks about their retirement plans as the result of stock market losses. 32% will not change their date; 16% will change the date fo a couple of years; 16% will change their retirement date by two to five years, and 36% report their will never be able to retire. Not good news for charitable planners.

A Scottstrade survey reveals only 32% of Americans believe the will someday be able to stop working completely ...down from 39% last year. 43% of respondents said their retirement savings have decreased 10% or more.


Bad Rich People.......

Based on 138,000,000 million taxpayers in 2007 when the total population as of July 2008 was 303,000,000 the:

Top 1% of taxpayers (1,380,000) pay 40% of all federal income taxes ($388,806 in income puts you in that category).

Top 5% of taxpayers (6,900,000) pay 60% of all federal income taxes ($153,542 in income puts you in that category).

Top 10% of all taxpayers (13,800,000) pay 71% of all federal income taxes ($108,904 in income puts you in that category.)


Joint Tenancy Traps.......Joint tenancy is a common form of asset ownership. the full legal expression for this form of ownership in Joint Tenants with Rights of Survivorship(JTWROS).

When one or more persons holt title to an asset each of them own the asset. When one joint owner dies the remaining joint tenants continue to own the asset.

It is common for married couples to acquire assets together and create a JTWROS. If one joint tenant becomes incapacitated, probate may be avoided. For this reason many individuals may add trusted family members or friends as Joint Tenants to their assets. Upon death probate will be avoided as long as there is at least one surviving Joint Tenant.

Sometimes simplicity may lead to unintended legal complexity. When children, siblings or friends are added as JTWROS it can turn into legal dynamite. Once you add someone as a Joint Tenant they own the assets just as you do. What was a convenience is now a problem if the Joint Tenant was to sell the asset, is included in a divorce, lawsuit or has creditors. You can lose your ownership through no fault of your own. Your plans in your Will or Revocable Living Trust may be lost with a Joint Tenant designation.

If incapacity planning is a major concern then a Durable Power of Attorney should be created.

If avoiding probate is the major concern hen a Transfer on Death or Payable on Death registration is appropriate.

New IRS Publication 526.......The IRS has released a new Publicaton 526, Charitable Contributions for preparing 2008 tax returns. Pub. 526 describes what qualifies as a charitable contribuiton and how to claim a deduction for a charitable donation. The form is available under IRS Downloads on my web site at the following link.

Pinehurst office: PO Box 3335, 15 Pinewild Drive, Pinehurst, NC 28374
Phone: 910-295-6800

Northeast office: 20982 Bayside Avenue, Rock Hall, MD 21661 Phone: 410-639-7758

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