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    Category Archives: Charitable Giving

    Family Financial Traditions

    With the holidays right around the corner, many of us are looking forward to celebrating our favorite family traditions.  But have you ever familybackbayoutingthought about having family ‘financial’ traditions? Most of our initial exposure to money management comes from our family upbringing. For parents who model good money management, they are passing on family traditions that go well-beyond Christmas morning pancakes.

    Don’t Just Give Your Kid an iPhone or Car

    The greatest motivator there is for a teenager is freedom and their path to that freedom is first an iphone, and eventually a car. When we just buy our kids an iphone or car, rather than supporting them to learn to earn money to pay for these things, we overlook one of the greatest opportunities we have for helping our kids to become self-sufficient.

    If you have an extra phone or car available for your child, consider requiring them to pay for the monthly data bill, or for the car’s gas and insurance.  By requiring our kids to contribute, we prepare them for a life of independence, which is a far better gift than any material item.

    Play the Stock Market With Your Kids

    Introducing children to the stock market is not a far-fetched idea. There is plenty of information available that can be understood by kids. First off, children are very aware of products — toys and games like the CashFlow Board Game, for example. They can be introduced to the fact that the companies that make these toys are owned by people like their parents, who hold shares of stock. From there, they can be shown the daily stock prices and how they change. As they grow older, your children can begin making small stock purchases and become comfortable with investing.

    Family Vacation Saving

    Family vacations are usually looked back on fondly and may even be considered family traditions. Saving during the year, by children as well as parents, for an annual vacation can also be part of that tradition and help teach good money management techniques.

    Whether it be from jobs kids have like grass cutting or babysitting, or just from allowance savings, it will serve children well later in life to have learned the value of setting money aside for a deferred pleasure.

    Charitable Giving

    Teaching kids to be charitable helps them become aware of the needs of others.  Introducing kids to putting money in the pot at church, or donating clothes to the local homeless shelter, gets them in the habit of giving from an early age.

    If you give to charity regularly, you may want to consider setting up a private foundation that can be used to consolidate your giving plus be used to educate your children about investing (all of the assets of the charitable foundation need to be invested) and giving.

    Estate Planning

    Involve your children in your estate planning as soon as they are old enough to understand. They will feel secure knowing you’ve planned well for what would happen to them, if and when something happens to you. Have them meet your lawyer, tell them about who would be their guardian, or how they will receive their inheritance and when. And, begin to talk now about how you can increase the overall family wealth you have and how you want to be cared for by them at the end of your life.

    Early Entrepreneurship

    Supporting your children to think like entrepreneurs can be one of the greatest gifts you give them. As the world shifts, we are moving into a new economy in which reliance on traditional jobs no longer provide the security they once did. Technology will replace many of the jobs people relied on in the past and the only real security going forward is resourcefulness, creativity and community, all of which is learned via the path of entrepreneurship.

    One simple way to encourage entrepreneurship for small children can be as simple as setting up a lemonade stand.  For older children, encourage them to babysit or tutor as a way to make money.

    For more financial and estate planning guidance, contact your Newport Beach Trust and Estate Planning Law Firm. We help families secure their future through proper estate planning.  Call our Client Services Director, Bonnie Johnson, at (949) 718-0420, to receive a free copy of Laura Meier’s #1 best-seller Good Parents Worry, Great Parents Plan, when you schedule a planning session with a Meier Law Firm attorney.

    Using Life Insurance for Charitable Gifts

    This article is provided by Paul Glowienke, Financial Advisor with Northwestern Mutual

    The greatest advantage of a gift of life insurance is that a donor can make a substantially larger gift to charity by using life insurance than by giving any other asset. Relatively modest annual premiums mature into a substantial death benefit at the donor’s death. This is further enhanced when a charity owns the policy because of the income tax charitable deduction the donor receives.

    The donor’s gift (cash to pay premiums) essentially costs less. For example, for a donor in a 30% tax bracket, a gift of $2,500 really costs $1,750 after factoring in the income tax charitable deduction.

    The gift of an existing policy can be relatively “painless” to the donor in several respects. The transfer is simple; all that is required to complete the transfer is a change of ownership form. Absent a loan on the policy, the donor does not recognize income no matter how large the gain. In addition, if the donor does not intend to use the policy as a source of cash, a gift of a policy is not often perceived as a “loss” of an asset.

    A charity-owned life insurance policy requires less administration by the charity than many other assets, like real estate or business interests. In addition, the charity can easily take advantage of cash values in the policy before the donor’s death by using loans or withdrawals. Both the cash value buildup and the death benefit are generally income tax-free to the charity.

    The death benefit, whether from a policy owned by the charity or with the charity as beneficiary, is received by the charity without reduction for estate or income taxes and is not subject to the delays and expenses of probate. The death benefit is less likely to be contested by the donor’s beneficiaries than other assets.

    Congress encourages charitable contributions by providing income tax deductions for gifts to charity. In order to take advantage of these deductions, a donor must meet certain requirements and is subject to certain limits:

    • If giving an existing policy, the amount deductible is the lesser of the donor’s basis in the policy or the policy value.
    • If giving cash, the amount of cash given is the amount deductible.
    • If the gift is to a public charity, the deduction is limited to 50% of the donor’s AGI. Public charities are generally organizations that receive their funding from government and the general public. Some examples of public charities are schools, churches, hospitals, charities for disease prevention or cure, and charities that benefit the community.
    • If the gift is to a private foundation, the deduction is limited to 30% of the donor’s AGI. Private foundations are generally organizations that receive their funding from a small number of donors, often members of the same family.
    • Deductible amounts not used in the current year because they exceed AGI limits may be carried forward for the next five years.
    • The donor must obtain a contemporaneous written acknowledgment from the charity for any contribution (cash or non-cash) of $250 or more.
    • If the amount of the charitable deduction claimed is more than $5,000, the donor must also obtain a qualified appraisal.

    It is vitally important that you check with your financial advisor and your CPA when considering gifting or creating a life insurance policy that will benefit your favorite charity. It is a sophisticated way for you to become a voluntary philanthropist.

    **Article prepared by Northwestern Mutual with the cooperation of Paul Glowienke. Paul Glowienke is an Insurance Agent with Northwestern Mutual, the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, Wisconsin, and its subsidiaries. Paul Glowienke is a Registered Representative of Northwestern Mutual Investment Services, LLC, a subsidiary of NM, broker-dealer, and member FINRA and SIPC. Paul Glowienke is based in Newport Beach, CA. To contact Paul Glowienke, please call 949-863-5803, email at, or visit**

    10 Tips for Charitable Giving This Holiday Season

    According to a recent Forbes article, Americans donated more than $316 billion to charity last year – and most of that came from individuals.  Holidays are a traditional time of giving, and not just because we like to get in those year-end tax deductions!tax

    Forbes provided 10 tips for getting the most out of your charitable giving this year:

    1.  Be sure to itemize.  The IRS requires that you itemize your charitable deductions each year on your 1040 so be sure to keep careful records.

    2.  Get a receipt.  If you are giving property, be sure you get a written receipt from the organization and that it lists the items you have donated.  If you are giving cash you need a receipt as well – either from the charity or a cancelled check or credit card receipt that includes the name of the charity.

    3.  Choose wisely.  Not every charity is recognized by the IRS as an exempt organization.  You can check by name at the IRS Exempt Organizations Select Check website.

    4.  Remember payroll deductions.  If you give via a payroll deduction, your employer should furnish you with a record of your annual deduction.

    5.  Deduct value of incentives.  If you receive something in exchange for your donation – even a coffee mug or a t-shirt – you are required to deduct the value of that item from the value of your donation.

    6.  Consider giving appreciated assets.  You can receive a double benefit if you donate an appreciated asset like stock or real estate.  If you have owned the asset for at least a year, you can deduct the fair market value and avoid paying any capital gains tax.

    7.  Understand what you can deduct.  If you provide services to a charitable organization, you can deduct things like mileage or supplies, but you cannot deduct your time.

    8.  Document gift value.  Non-cash items need to be documented in terms of the item’s condition in order to assess a fair market value.  If your donation is worth more than $500, the IRS requires a written appraisal for fair market value.

    9.  Be aware of limits.  Many people are not aware that there are limits on charitable contributions, which are tied to your adjusted gross income (AGI).  If you give more than 20 percent of your AGI, then you may run up against these limits, which vary according to the gift (cash, non-cash items, appreciated assets).

    10.  Give by year-end.  You will only receive deductions for those items or cash you give during the calendar year, so be sure you make your donation by Dec. 31.  If you gift via check or credit card, you will receive the deduction as long as they are recorded by Dec. 31 – even if you don’t pay the credit card or the check isn’t cashed until 2014.

    If you would like more information about protecting your assets, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for an Achieve Your Dreams Planning Session, but I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call your Newport Beach Trust and Estate Attorney today at 949.718.0420 to schedule a time for us to sit down and talk.

    A Worthy Year for Giving in Newport Beach

    As the tax year draws to a close and the
    holidays evoke feelings of goodwill, nonprofits count on getting the lion's
    share of donations during this crucial fourth quarter. While unemployment stats
    in recent months have been better than expected, experts predict a difficult
    end-of-year climate for nonprofits.

    Please Give sign on coinsYear’s end is just about upon
    us, but when it comes to tax-planning, there is much to be done before breaking
    out the bubbly. For non-profits and your favorite charities – the ones that
    have survived these past few, hard years – this could be a make-or-break giving

    Why would this December be an
    especially trying time for charities? US
    and World Report offered
    their own pithy list not too long ago and it’s worth a pause: “Nonprofits Face Challenging End-of-Year
    Giving Season
    .” Simply put, at
    a time when the services of charities have been needed more than ever (with hurricanes,
    droughts, and winter storms all taking their tolls during a sluggish economy)
    charitable giving has, understandably, been less than “generous.” That said, as
    a recent article published by the Chronicle
    of Philanthropy
    indicates, the “Average Gift by the Wealthy Has Declined
    Since 2009

    If you’re inclined to contribute
    to a worthy cause before year’s end, you are well-advised to visit with your
    estate attorney or financial advisor about ways to best leverage your gift both
    for charitable and tax purposes. There are many strategies available that may
    make a larger gift more affordable than you think.

    A great upcoming charity event is the OCYE Casino Royale Winter Gala benefitting Big Brothers Big Sisters Orange County. The event is at a 15,000 sq. ft. home in Shady Canyon and features a James Bond theme, fine dining, cocktails, casino games, raffles, live band, and awesome prizes. It is the must-attend event of the holiday season! Buy your tickets today!

    Contact your Newport Beach
    estate planning attorneys at Meier Law Firm to discuss all of your estate planning

    References: US News and
    World Report
    (November 12, 2012) “Nonprofits Face Challenging End-of-Year
    Giving Season

    The Chronicle of Philanthropy (October 29, 2012) “Average Gift by the Wealthy Has Declined
    Since 2009

    Annual Gift Exclusion Gets a Friendly Bump for Newport Beach Families

    can generally receive up to $13,000 a year as a gift without getting hit by a
    federal gift tax. In 2013, as a result of cumulative indexing, this amount is
    projected to increase to $14,000 per person.

    Gold Gift BoxSometimes it’s the little
    things, and in this case the little updates to the tax code that are worth
    celebrating. If you haven’t heard already, the annual gift tax exemption will
    jump from $13, 000 to $14,000 per year per person starting in 2013.

    This increase has been a small
    victory heralded by the financial press, included in a recent CBS MoneyWatch article titled “Gift-tax limits to rise in 2013.

    Now, the extra $1,000 may not
    sound like much if you haven’t been making full use of your gift limits.
    Nevertheless, when it comes to tax advantage wealth transfers, every little bit

    In fact, annual giving to loved
    ones is a time-honored tradition and strategy. Every portion of your estate
    given removes that much from coming under the estate tax scythe at your death.
    Remember: beginning in 2013 you can transfer $14,000 per year per
    , to as many persons as you see fit, without reducing your
    lifetime exclusion (currently $5.12 million, but we’ll see what comes of that
    in 2013).

    In addition, these gifts don’t
    count as charitable gifts either, which are without limit and can provide
    significant tax deductions when done correctly. If you are looking for even
    more ways to maximize your wealth transfers through gifting, then consult the
    original article. For example, two very specific and useful suggestions are to
    make gifts to cover educational costs (i.e., tuition) or medical costs.

    Gifting is such a powerful
    wealth transfer method, and any small victory (even a $1,000 increase in the
    annual gift exclusion) is worthy of attention and consideration.

    Contact your Newport Beach
    estate planning attorneys at Meier Law Firm to discuss all of your estate
    planning needs

    Reference: CBS MoneyWatch
    (October 10, 2012) “Gift-tax
    limits to rise in 2013

    To Give or Not To Give (In 2012) – An Important Question for Newport Beach Families

    Hurry up and wait – that's what some financial
    advisers are telling their clients as an uncertain tax environment makes it
    tough to plan charitable giving in 2012.

    Please Give sign on coinsWith 2013 almost upon us and
    only two short months of 2012 to go, now is the time to act. For some matters,
    like planning for your estate and gifts to loved ones, that means acting with
    immediacy. But then again it might still mean to just hurry up and wait!

    Depending upon your goals and
    hopes for the coming year, it might still be time to wait when it comes to
    charitable gift planning.

    The rallying cry of “hurry up
    and wait” regarding charitable giving was sounded by Reuters in a recent article titled “Charitable
    giving in unclear tax times
    .” One
    reason for playing “wait and see” is that we are still in the dark when it
    comes to the tax implications 2013 will bring. In fact, that darkness may not
    lift until long after the election, especially with retroactive tax policies a

    Nevertheless, giving is easy, as
    far as major financial moves go. So you can wait and see if some definitive
    answer pops up before year’s end. If 2013 will be a bad year tax-wise, and the
    gift can wait until 12:01 a.m. on New Year’s Day, then the deduction can do the
    most good to offset new taxation. But, on the other hand; you might not want to
    waste the giving opportunity this year, and a deduction for 2012, by that

    In the end, you might end up
    going with your gut instinct on this one either way. Unfortunately, your legal,
    financial and tax advisors likely do not have a crystal ball to help you make
    the call.

    Contact your Newport Beach
    estate planning attorneys at Meier Law Firm to discuss all of your estate
    planning needs

    Reference: Reuters (October
    18, 2012) “Charitable
    giving in unclear tax times

    Five Ways To Be Charitable

    There is certainly a place for special
    trusts and foundations, but they are not a requirement.  There are many ways people aren’t aware of to
    be charitable both in your own family and also in your community.

    Giving can be complicated,
    especially when it moves beyond handing over cash or writing a check. A recent Forbes article provides some practical
    advice you may not have considered. The article is titled “Five Ways To Be Charitable Even If You
    Aren't Bill Gates
    .” And if you’re not Bill Gates, the “five ways” do
    not require the complexities of family foundations.

    Here are the Forbes tips for your charitable

    1. Give the gift of
      Have you thought about giving to your own children or
      grandchildren and in the form of a 529 college savings plan or a direct gift to
      the college?
    2. Give your IRS
      distribution to charity.
      Since you have to take your required minimum
      distribution anyhow, send it directly to a charity instead. This option is
      available for the remainder of 2012, but its future is uncertain. 
    3. Name
      your charity as your beneficiary on your retirement account.
      This option is
      appropriate if you’ve decided that any retirement funds left over should
      eventually pass to charity instead of loved ones. Be sure to designate your
      charitable beneficiaries accordingly! Note: The full amount of your retirement
      account given to charity is income tax free. If left to a non-charity, then the
      full amount is taxable as ordinary income.
    4. Donor-advised funds. By giving to a
      donor advised fund, you can give today, take the charitable deduction in this
      year’s taxes, but decide which charities to benefit next year or beyond. They
      are easy to establish too.
    5. Charitable gift annuity. Are you keen
      on the idea of receiving a guaranteed lifetime monthly income, especially as an
      assurance in old age? If you also want to benefit charity in the process, then
      consider hitting two birds with one stone by opting for a charitable gift

    This is just an overview of the
    “five ways” featured by Forbes, so be
    sure to consult with your financial, tax, and legal advisors regarding the
    appropriateness of each for your circumstances.

    Contact Meier Law Firm to discuss all of your estate planning options.

    Reference: Forbes (September
    20, 2012) “Five Ways To Be Charitable Even If You Aren't
    Bill Gates”

    Big Charitable Donors, Big Charitable Decisions

    What surprised us most in our Forbes
    Insights study was something that also emerged among attendees at the Summit: not just the
    scope and scale of the wealth they plan to disburse, but how quickly they plan
    to do so.

    When it comes to charitable
    giving, you’ve got to think big. Big projects, big goals, and big problems.
    What better way to think big then to think like the very biggest players in the
    arena of charitable giving.

    A recent Forbes article offers some insights into the thoughts and
    intentions of uber-wealthy philanthropists. The grist for this journalistic
    mill was recently a summit held in New York. The article bears the catchy title
    of “How to Give Away A Billion Dollars.

    It’s worth reading the original
    article, if not only for a few reported mission statements. One thing to note
    is the tension between farsighted concerns and legacy in particular, against
    the desire to see immediate effect and business-like efficiency. This is a very
    real tension and just may affect how you go about your own charitable giving.

    Then again, you might be more
    concerned with the future of charitable giving, and there’s a companion piece
    for you titled “How The Next Generation Of Wealth Is
    Revolutionizing Philanthropy As We Know It

    References: Forbes
    (September 18, 2012) “How to Give Away A Billion Dollars

    Forbes (September 18, 2012) “How The Next Generation Of Wealth Is
    Revolutionizing Philanthropy As We Know It

    Charitable Giving – Staying Under the Radar Screen

    Giving anonymously isn’t easy, especially
    for the superrich.

    Most charitable givers do not
    give for the attention they will receive as a result. In fact, most of them
    eschew attention because it tends to only invite more uninvited “attention” for
    further generosity.

    Whatever your reason, consider
    taking steps to ensure your own anonymity even as you go out and try to ensure
    the wellbeing of your favorite charities. How do you give anonymously?

    In short, this is a common
    predicament and there are several established charitable vehicles for giving
    with solutions that promise some amount of anonymity. Some, as you may expect,
    are better than others.

    For a breakdown and analysis of
    these vehicles, take a look at a recent Forbes
    article titled “How To Stay Anonymous When You Give To
    .” In the end, the
    best solutions tend to vary based on the nature of the assets you intend to
    give, the scope of your giving, and on the charitable recipients.

    ReferenceForbes (September 19, 2012) “How To Stay Anonymous When You Give To

    Buffett Birthday Benefits His Children’s Charities

    Warren Buffett celebrated his 82nd birthday
    Thursday by announcing an additional $3.1 billion in donations to the charities
    run by his three children.

    Most of us spend our birthdays
    receiving gifts. In fact, that’s been the standard operating procedure since
    our first birthday.

    We all can learn from Warren
    Buffet’s example, however, and the so-called “reverse birthday.”

    In an article titled “Buffett gives $3 billion to his kids'
    ,” CNN Money
    reports how the Oracle of Omaha celebrated his most recent birthday “in
    reverse.” While Mr. Buffett already pledged some 17.5 million Class B shares of
    his firm, Berkshire Hathaway, to each of his three children and their
    respective charitable organizations back in 2006, now, in an open letter to his
    children, he has doubled down to about 29.7 million Class B shares. Mr. Buffett
    himself even estimates that the annual distribution will average more than $100
    million each.

    Whether there’s an approaching
    birthday or other occasion to celebrate, there may be something to take away
    from the Oracle’s example. Mr. Buffett is giving to his children and working to
    charitable ends in the same moment.

    So who do you love, what do you
    care about, and what are your loved ones passionate about?

    Contact Meier Law Firm to discuss your gifting options.

    Reference: CNN Money
    (August 30, 2012) “Buffett gives $3 billion to his kids'

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