February 2012 – The Joys of Planning

And the Joys of Giving
Both donors and charities speak glowingly about the joys of giving.  The charities are joyful about generous giving because with it they can continue to do all the good things which define their mission.  Donors are joyful because the values they consider important are being advanced and because they are part of a mission which as individuals they could not accomplish alone.

But there are also joys in planning.  (Actually, without planning, very little gets done – just ask any successful business owner.)  This is especially true in our area of charitable support – charitable gift planning through estates.  This is why we share with you, our readers, this quarterly newsletter – so you can choose which of the plans of giving is most suitable for you.

A Living Example
As we get to meet and to know more of Ananda’s donors, some unique and interesting stories come to light.  The following is one that gives us some insight on a very unique use of gift planning that is not always understood.

Mr. and Mrs. Dee became involved with Ananda because they liked what they saw.  Mrs. Dee especially became involved with Ananda’s work and has visited Ananda Village regularly over the years. From her experience, Ananda “walked the talk,” meaning they did well what they said they were going to do.

Mr. and Mrs. Dee had no children, so their nieces, nephews and their charitable interests became their heirs.  They consulted with their team of advisors:  lawyer, accountant and stockbroker.  They decided on a plan which would meet all their objectives and yet give them considerable flexibility.

A Combination of Plans
Their plan utilized the functions of a will, a living trust, and life insurance.  They would name their nieces and nephews as the beneficiaries of special bequests and of their life insurance estate.  Their will also had a “pour-over” provision that would allow their executor to gather up the remaining assets of their estate, liquidate them and “pour-over” that value into their living trust for final distribution.

That living trust, however, was not an ordinary trust.  It was a self-administered Charitable Remainder Unitrust (CRUT).  Mr. and Mrs. Dee were both the trustees and the income beneficiaries of this trust. As long as the charitable remaindermen qualified as charities under IRS Code Regulations, the Dee’s could name as many or as few charities as they chose as beneficiaries, even “disinheriting” some as their interest in those charities waned.

Multi-functions
Mr. and Mrs. Dee began funding their CRUT back in the 1990’s when there was still considerable stock appreciation. Over the years, they have continued to fund their trust with appreciated securities and, each time they did, they received a charitable deduction for the full market value of the securities.
Because they didn’t really need the income from the trust, they could use the CRUT’s income distributions to help fund their annual charitable giving, thus increasing their charitable deductions.

What makes this example quite unique is that “pour-over” provision of the will that transfers the remaining value of their estate into the living trust, in this case, a Charitable Remainder Unitrust, and that the CRUT then distributes the proceeds to the charities.

While there are no income tax advantages, there are state and federal estate tax deductions for the value distributed to the charities.

It Works for Them
What Mr. and Mrs. Dee have come up with is a very creative and flexible estate plan that uses the plans of giving to achieve their current and long-term desires.

  • They are in total control.
  • They can increase or decrease the flow of assets into the trust.
  • As trustees, they can sell and buy securities within the trust as tax-free transactions.
  • They can shape the nature of the income distributions from the trust – ordinary, long-term capitol gains, or tax-excluded return of principal.
  • They can determine who the charitable beneficiaries are and what percentage of the remainder interests will go to which charity.

This plan works for them because of their unique situation. Mr. Dee is an astute investor; their education and training have enriched their lives so that they can plan to be generous to others; their family responsibilities are such that they can afford to support the charities which reflect their lifetime values.

The Janaka Foundation is thankful that Ananda has such meaning for Mr. and Mrs. Dee. We are confident that Ananda will continue to represent their charitable interests far into the future.

What Works for You?
Each one of us has our own life situation.  What works for one may not work for someone else because of their different circumstances.

Everyone has choices. You can choose to do something – or you can choose to do nothing.

Everyone has values. You can support and invest in them – or you can do nothing so they don’t achieve their potential.

Mr. and Mrs. Dee have been singularly blessed. They have had the where-with-all and the means-by-which to make a choice that supports their values through their giving. They have goals. They developed plans. They now have the joy of giving and the joy of seeing their planning bear fruit.

If you are reading this newsletter, it means you have one thing in common with others who are doing so:  you have been touched by one or more of the ministries and programs offered by Ananda. And if Ananda’s work is valuable to you now, it will be of value to others in the future.  This awareness may lead you to want to ensure that Ananda will continue and prosper in the future.

The steps you take today will make possible the future of Ananda’s work  tomorrow:

  • Discuss your charitable intent with family members.
  • Make appointments with one or more of your team of advisors (lawyer, tax accountant, investment advisor) so you can keep your planning moving forward.
  • Call us for our input.  We may just have some ideas that will work for you.
  • And when you’ve completed your estate plans, join the Janaka Legacy Fellowship so your intentions can serve as incentives for others.

For further information: Contact Parvati Hansen at the Janaka Foundation office:
530-478-7695
Thank you for taking the time to consider including us in your estate planning. It it very much appreciated.

In divine friendship and joy,

Parvati Hansen
Executive Director
Janaka Foundation