Jain Digest 2005 11

Author(s): Federation of JAINA
Publisher: USA Federation of JAINA

Page 12

PLANNED GIVING AND JAINA
Many affluent Jain individuals have spent their lives benefit others, bring more meaning to one's life, and to conacquiring wealth through hard work and long hours, but nect with a community. Parents, engaging in charitable givhave not taken the time to formulate a well-designed plan to ing can serve as role models for children by demonstrating distribute their wealth. Estate planners say the three most how wealth can be used wisely and selflessly. Sharing the frequently discussed issues are how to:
experiences of giving with the family or creating founda
tions and programs help build functionality and strengthen 1. Secure the livelihood of a spouse;
values in the family. Additionally, tax savings may mini2. Maximize the distribution to heirs;
mize the cost of such programs. 3. Minimize the estate tax
It is reasonable to conclude that charitable giving is When these issues arise, you are pitting two objectives fundamental to wise wealth management. Providing that against one another: How can wealth be preserved in the wealth has a worthwhile purpose, sharing values with chilfamily while simultaneously reducing taxes? Without prop- dren and grandchildren and connecting to one's community er planning, the more wealth you leave your family, the are certainly worthy reasons to pursue philanthropy. more estate taxes need to be paid. Philanthropy, however, can be used to reduce taxes and simultaneously help involve An astute wealth holder can use available tax benefits family members and transmit values.
to make charitable gifts cheaper, but will not allow the
reduction of these benefits to inhibit the wise use of wealth. The act of Philanthropy can give value to wealth. Here we have provided some information on the types of Through the analysis of needs (education, support, luxuries donations and benefits available. and contingencies), one can quickly conclude that they have WHAT DO DONOR'S GIVE? more than is needed. It is at this time that we should look beyond consumption. The accumulation of wealth is inher- 1. Cash and cash equivalents ently to serve the purpose of creating functionality and the 2. Publicly traded securities enabling the pursuit of happiness by children. The question 3. Closely held securities is can we send constructive messages to our children about 4. Life insurance the use of wealth.
Real estate
Personal property With philanthropy, wealth can be valuable even when 7. Retirement assets not used for personal consumption. Wealth can be used to 8. In-kind gifts and pro bono services
HOW DOES A DONOR GIVE?
Donor's Benefits
(1) Cash & Cash Equivalent
May take a charitable gift deduction for the amount of a charitable gift of cash or cash equivalents
2) Life Insurance
Can deduct the premium as donors pay them. Also can deduct the cash value
3) An Outright Gift of Appreciated Marketable Securities
4) A Charitable Lead Trust
A charitable value of the security on the date of the gift, provided the owner owned it for more than one year. In addition, a donor does not incur capital gains tax on the transfer of such securities to JAINA The capital value of marketable or income producing assets to remain in the donor's family. This is a very unique and efficient way of passing the donor's assets to the next generation A donor retains defined income interest for their lifetime. A large income tax deduction now. The trust can sell appreciated security and at the same time no capital gain tax on the realized gain A bequest to JAINA would qualify donor's estate for an estate tax charitable deduction equal to the entire amount one bequeath
5) A Charitable Remainder Trust
6) A Bequest
10 - WINTER 2005 Fontena
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