In the Dakotas, many of our churches are connected to agriculture. We have members that our farmers, retired farmers, and/or children who inherited farmland from their folks. The scary thing about farmland transactions is the tax basis. Most farmland has been held for decades so the tax basis could easily be $100/acre or less. If you sell that land, you’ll have to pay capital gains on all the gain over those decades.
If you have people in your church that are considering cashing out of the farm or maybe they don’t have a next generation willing or able to take over the farm, they may be wanting to donate that land to the church. You would be surprised by how many churches have received a quarter of farmland that is now a huge benefit to their current ministry.
Endowments can be a huge blessing to the church or ministry that you love, but few people understand how it works. I’m not sure I do the best in explaining it in this video, but imagine if one of the biggest annual givers to your church is a dead person.That’s what an endowment can do. We have people that have faithfully supported the church for 20, 30, 50 years, and they wish they could support it for 50 more. An endowment will allow them to do that.
A properly managed endowment reminds us of the saints that came before us and provides on indefinite and growing stream of income to the church. You also don’t need to be a multi-millionaire to establish an endowment that will bless the church for generations. A $10,000 endowment will generate close to $500/year for the church. That’s $500 that could be sending kids to camp or paying for Sunday School materials.
I don’t want this to sound like a gimmick or some slick way to raise money from gullible elderly church members. That is not what a Charitable Remainder Trust is. The Charitable Remainder Trust can be an wonderful part of a person’s retirement/estate plan. What makes it so wonderful? Here’s a list:
Guaranteed Income for Life: This will supplement social security and pension income. Rule of thumb is that you will receive 5% back on any assets you entrust…for life…and it will likely grow.
Protection of Assets: No one wants to see the financial assets that they accumulate during their lifetime dwindle away paying for nursing home care. These Trusts are irrevocable which protects them legally.
Lowering your Taxes: I don’t understand all this part, but it’s pretty clear that you will be lowering your tax bill considerably.
Supporting the Charities you Love: Many people fail to do any estate planning. After you pass, the assets of the Trust will go to benefit the charities of your choice.