- Posts by Julia CosentinoPartner
Julia Satti Cosentino is a partner in the Nutter's Private Client Department and co-chair of the Nonprofit and Social Impact practice group. She is experienced in complex estate and tax planning, probate and trust administration ...
Around this time every year, the IRS looks at whether there has been a year-over-year increase in the Consumer Price Index and announces inflation adjustments to the federal gift and estate tax exclusion amounts for the following calendar year. In general, these exclusion amounts tell a U.S. citizen or resident how much he or she can give away without incurring gift and/or estate tax on the transfer. Individuals and couples make use of these amounts, both during lifetime and at death, to transfer wealth to family and friends on a tax-free basis. When the amounts go up, it presents an opportunity to increase the tax-free giving. Given that inflation has been relatively sluggish, will any of these exclusion amounts be higher in 2017 than they are currently? According to the announcement just released by the IRS, the answer is “yes” for some but not all.
Senators John Thune (R-SD) and Ron Wyden (D-Ore) introduced the Charities Helping Americans Regularly Throughout the Year (CHARiTY) Act (S. 2750, summarized here) to “encourage charitable giving and make it easier for foundations and other tax-exempt organizations to conduct their charitable mission.” This legislation, among other things, streamlines operations by changing the private foundation excise tax to a flat one-percent tax, creates a limited exception to the private foundations’ excess business holdings rule, allows the Treasury Department to update the standard mileage rate applicable to personal vehicle use by volunteers (see here for current rate) and, most significantly, expands the IRA charitable rollover to include donations to donor-advised funds. This last measure is viewed as a logical next step that builds upon the Protecting Americans from Tax Hikes Act of 2015 (PATH), which President Obama signed into law last December and was regarded by many as only a partial victory for the charitable sector. While PATH provided certainty for philanthropic planning by making the IRA charitable rollover permanent, as explained here, it did not go as far as extending the reach of the rollover benefit to donor-advised funds.
During the Perkins School for the Blind annual fundraising gala, Perkins Possibilities 2016, we witnessed the launch of the powerful social change campaign called BlindNewWorld. The campaign aims to help the sighted population break down barriers to blind inclusion like discomfort and fear and create a more blind-friendly world. This got us thinking: how can we do a better job of taking the needs of clients who are blind or visually impaired into account when designing our estate planning services? We came up with three ideas we want to share.
From April 9 to April 12, I had the good fortune to be part of the Council on Foundations 2016 Annual Conference. The Council welcomed nearly 1,400 leaders in the philanthropic sector to Washington, D.C., for plenary programs and concurrent sessions focused on "the Future of Community through the lenses of identity, purpose, and place." Here are four of my biggest takeaways from the Conference:
1. When you want to fill a room to capacity, talk about the Chan Zuckerberg Initiative. One concurrent session was so popular that attendees filled the seats, stood along the walls and sat on the floor. The topic that drew this crowd was "Philanthropy Outside the Tax-Exempt Model." The discussion covered the alternative vehicles for individual and corporate giving, such as public benefit corporations, L3Cs and B-Corp certified companies, which have been embraced by a new generation of philanthropists, most notably Mark Zuckerberg and his wife Dr. Priscilla Chan.
3 Things to Remember About Documenting Charitable Gifts of Property, Securities and Art.
Last month in this blog, we described five ways to be diligent about documenting charitable gifts of cash or out-of-pocket expenses to preserve your tax deduction. But what about gifts of property – does giving something other than cash change the taxpayer’s responsibilities? According to the tax regulations, the answer is no and yes.
How can you determine if you’re allowed to claim a charitable deduction for amounts you paid to support your favorite charities? And what paperwork do you need in hand before you can claim that charitable deduction? Here are five ways to observe the requirements for charitable gifts of cash.
If you already understand what a typical estate plan looks like, you can skip to the next paragraph. Put simply, it is more than just a will. Instead, a typical estate plan contains four documents: a will, revocable trust, health care proxy and power of attorney. The health care proxy and power of attorney are designed to operate during your lifetime, while the will and revocable trust control how your property is dealt with after your death. The will tends to be a relatively simple document by which you give away your personal belongings and name the personal representatives who are to administer your estate. The trust, on the other hand, distributes the balance of your assets among the people (and charities) you care about and names the trustees who will administer the trust property according to your wishes. The trust is necessarily more complex than the will, because it is where the tax planning provisions are found.
Foundations are effective vehicles for families who want to make a collective philanthropic impact now and for generations to come. Traditionally, foundations have achieved this impact solely through strategic grantmaking. A growing number of foundations are looking for ways to go further, however. These foundations seek strategies that will allow them to deploy their investment portfolios – in addition to grantmaking – to advance their charitable missions without hurting the value of their endowments long-term. One such strategy, using “mission-related investments” or MRIs, is trending in the press and at sector conferences, but most foundation directors and trustees have yet to jump on its bandwagon. New guidance from the IRS may change that.
No two families are exactly alike, but all family members share common opportunities and challenges as they seek to take care of each other and leave a lasting legacy the next generation can build on. In this blog, the experienced attorneys in Nutter's Trusts and Estates and Nonprofit and Social Impact Advisors groups offer news and insights for individuals, couples and multi-generational families who are looking to convey wealth (and its responsibilities) to children and grandchildren, make a philanthropic impact in the community and prepare for the life events we all can face.