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February Newsletter 2011

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Planned Giving Mentor

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

Quotes for today: I resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution. Andrew Carnegie


What would you do?....This new column with answers by expert planned gift professionals will appear next week. If you have a question or an issue you would like to discuss send it along and I will share the responses.


How many words in our tax code? see answer in News and Notes below.


When do individuals do legacy planning?.....Lifestyle changes prompt legacy discussions. Look for those in their pre-retirement, retirement years and senior retirement years going through lifestyle changes. This is an opportunity to prompt a legacy discussion. Monitor the illnesses and deaths in your donor base as they are traumatic lifestyle events and necessitate changes.

Individuals have to navigate the often confusing process of executing and/or revising a will or trust as they make the difficult decisions about the division of property they own. Oftentimes plans are executed in a vacuum and family is not involved. Think about suggesting a family meeting before or shortly after all the legalities of the process are completed. This allows time for a full and frank discussion of wishes.

How would charity be involved? Suggest ways the individual can chart the course for a purposeful life in all your publications and web site information.

Check out the article Money and Meaning by Thayer Willis, I think you will find it informative.


Marketing tip: Gift annuity birthday cards.....Do you send birthday cards to all your single life and two life annuitants? My spouse just received an nice hand written card from a charity we supported with a gift annuity. A birthday card can be a way to not only thank donors for their support but a way to remind them of the current gift annuity rates. ___________________________________________________________
Retirement plan strategies? Fidelity Investments reports 401(k) balances reach a 10 year high. Analysis showed based on their 11 million accounts an average balance rose to $71,500 at the end of December, 2011. For 10 year+ participants the average balance rose to $183,100 from $59,100 in 2000.

Strategy: An individual may withdraw funds from their 401(k) and gift to charity and the net effect if they itemize deductions is no increased taxes but also no additional government bonus from the tax deduction as the net result is a total offset. If they are over 70 1/2 and rollover their balance from the 401(k) to an IRA they are eligible in 2011 to take advantage of the IRA rollover option, allowing them to make tax-free transfers up to $100,000 directly to charity.


Size of Boomer and Senior markets: 77 million Americans make up the Boomer Generation. By 2015 those age 50 and older will represent 45% of the U.S. population. Adults 50 and older own 65% of the aggregate net worth of all U.S. households, and have $2.3 trillion in disposable income. The Senior population grows every day and the 65+ population will double to about 71.5 million by 2030.

In 2004 there were 36.3 million Seniors over age 65, comprising 12% of the population but by 2050 they will make up 21% of the population.

There were 67,473 centenarians (people age 100 or older) in the United States on Nov. 1, 2005.


News and Notes....As of February 1, 2010, the tax code contained 3.8 million words, up from 1.4 million words in 2001. The statistic doesn't yet include the 579 tweaks Congress made to the tax code in 2010. Source: Waller Financial Planning Group Newsletter

70% of taxpayers claim the standard deduction, millions may be leaving money on the table because they do not take the time to keep all the documentation that could add up to bigger tax breaks.

Since the income tax started in 1913 there have been 33 times the top tax rate has changed.


More on Roth conversions....Bank of America executed more than 56,000 Roth IRA conversions containing $3.8 billion last year, up from 12,000 conversions in 2009. Over a quarter of the transfers (14,500) worth $1.4 billion were executed in December 2010 alone. The average Bank of America Roth IRA conversion amount was $68,000, up from $22,000 in 2009. Last-minute converters in December shifted even more into a Roth IRA, averaging $94,000.

I have a seminar on the power of charitable giving during a Roth conversion. For information and a proposal email me.


Kudos Corner

This is a new section where I will be periodically highlighting some gift expectancies and gift program elements I think will be helpful and informative, not all gifts are included.

Kudos Corner will return next issue.


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, 15 Pinewild Drive, Pinehurst, NC 28374
Phone: 910-295-6800

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

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