Spring 2008 Newsletter

Click this link for your November 2007 issue of Planned Giving Mentor in PDF format. This issue starts with some of the basic foundation activities to consider when beginning a planned gifts effort, it is an excellent review and another fact filled issue.

A complete collection of past Connell & Associated authored PG Mentor articles along with other useful items check out Planned Giving Mentor.

As the United States has become an older nation, reverse mortgages have grown into a $20-billion-a-year industry, with elderly homeowners taking out more than 132,000 such loans in 2007, an increase of more than 270 percent from two years earlier. In surveys, many borrowers say reverse mortgages have improved their lives and provided money they needed for retirement. Planned gift strategy is to offer a gift annuity in exchange for the life interest in a home or farm. As real estate values recover from the current slump this should provide excellent long term support for the patient charity which thinks of planned gift programs as a living endowment.

See Useful Links for reverse mortgage calculator and background informaiton.

AARP recently reported increased awareness of reverse mortgages has increased from 51% to 70% and borrowers are younger than ever with a median age declining from 77 to 73.

While we are on the subject did anyone see the March 20 issue of investors daily? On page A6 there was a long article on "A House Given Away Can Pay Cash Now, Cut Heirs' Tax Later" Of course this was a simple charitable gift annuity for a life estate in a home or farm. This article pointed out the tax savings are normally sufficient to purchase a life insurance policy to replace the asset in the donors estate.

Looking for a seminar topic....my suggestion is to construct your seminars around the following topic.....“Top Ten Fatal Estate Planning Mistakes”

1. No Plan: Here you can cover the fact 70 % of Americans have no plan at all because of good old fashioned procrastination. Estate planning is a matter of personal responsibility.

2. No Incapacity Planning: Too many people regard estate planing as merely and after-death distribution of their assets but a comprehensive plan begins with planning for your own incapacity by making health and financial decisions.

3. No Back-Up Parents: Most parents consider their children their most valuable asset but fail to appoint guardians for their minor children in the event both parents die.

4. No Inheritance Protection: If you do not incorporate inheritance protection into your estate planning, your hard-earned assets could be squandered by your surviving spouse’s new spouse, your children or grandchildren or lost in their divorces.

5. No Basic Estate Tax Planning: A married couple can protect up to $4 million of their assets from federal estate taxes through proper estate planning. However, if your plan includes “Sweetheart Wills” then you are likely shortchanging your loved ones.

6. No Estate Tax Planning for Life Insurance: Life Insurance is a fundamental financial tool but Americans do not own enough life insurance or do not own life insurance properly.

7. No Probate Avoidance Planning for Multi-state Real Estate: Real estate owned in a state is subject to probate in the state in which it is located unless you make appropriate legal arrangements.

8. No Income or Estate Tax Planning for Retirement Plans: Much individual wealth in America is in qualified retirement plans. Without careful coordination between an estate plan and the financial plan more than 50% of a couples retirement plan may go to the IRS instead of loved ones.

9. No Business Succession Planning: Statistically, only 30% of family businesses survive from the founding generation to the next because there is no plan or the plans are outdated.

10. No Tax-Savy Lifetime Giving Program: Often overlooked and therefore under-utilized is the opportunity to take advantage of the annual gift exclusion and/or the lifetime gift exclusion. Gifts not only remove assets from an estate but the eventual growth of the assets is removed. Charitable gifting also removes assets and has the added benefit of an income tax deduction.

Each of the above topics can be expanded upon to form the bais of one or more seminars to which your top planned giving prospects can be invited.

Call for information on a seminar topic tailored to your special situation by Connell and Associates. 919-295-6800 or e-mail: jec42644@aol.com

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