Barring unforeseen circumstances, you can determine how much is enough to maintain the standard of living you believe God would have you maintain. For those fortunate enough to have more than needed, they can ask “Why has God given me more than enough?”
Some make the case that since the future in unknown, assets should only be distributed at death. A wit has suggested “the golden years” got the name because it takes a lot of gold to pay the doctors! Fortunately, most seniors today are covered by Medicare and carry supplemental insurance for a large portion of expenses.
Others suggest that if you have more than enough now, you could transfer assets to family members or your favorite ministries and enjoy seeing them benefit from your generosity while you are living. If you find yourself ready and willing to give now, what assets should be transferred? In practical terms, certain assets may provide greater benefit than others.
Consider assets that have appreciated in value. If gifted to personal beneficiaries during your lifetime, these assets retain your original cost basis and would be subject to capital gains tax on appreciation when sold. However, a transfer of highly appreciated assets to charity eliminates the capital gains tax. The result can be a saving of 15 – 25% of the asset value which would be paid in capital gains tax if the asset was sold.
Assets other than securities need to be considered based on marketability, valuation, and indebtedness (liens) against the property. For example, where a mortgage has been on the property for less than five years, restrictions may apply.
As you can imagine, there are rules and limitations regarding charitable gifts. When properly used, generosity strategies can make a positive impact on your current gifts and the final distribution of your estate.
What This Means for You
We have prepared a booklet that asks questions which may help you as you prepare your giving plans. Check out our e-book, A Practical Guide to Giving Generously, with no cost or obligation. If you like, we would be happy to help you review your specific circumstances as you grow in your giving life.