▾ Planned Giving Intro

There are specific times and events in your life when planning your gifts can result in great benefit for both you and your favorite charities. Important events include the sale of appreciated assets, sale of a business, sale of a farm, and retirement. All of these are excellent times to consider a Planned Gift.

Planned Gifts may be made either during your lifetime or at death. They usually involve the assistance of professionals such as your accountant, attorney or financial planner.

Bible League International knows the difference planned giving can make. We have witnessed the peace of mind it provides, not only for you, but also for family members. We have seen, as well, the great good done when a bequest comes to Bible League International.

It is for this reason that Bible League International has partnered with Barnabas Foundation to provide quality planned giving and estate planning. These services are completely confidential and are provided at no cost.

For more information, click on the links below. If you have further questions, please contact us toll-free at (866)-825-4636 or by emailing PlannedGiving@BibleLeague.org.

▾ Estate Planning Questions

We are a member of Barnabas Foundation, an organization that provides Estate Planning and Planned Giving expertise to Christians around the country. As one of our supporters, you have access to their services at no cost and with no obligation.

Barnabas Foundation exists to help individuals exercise good Christian stewardship through thoughtful Estate and Gift Planning. A representative from Barnabas Foundation will be happy to visit with you about your Estate Plan and provide information on specific concerns or questions you may have. They provide confidential, objective Estate Planning at no cost to you.

Is an Estate Plan the same as a Will?
A Will is a legal document that describes your plans for your property upon your death. It is the foundational document required for all Estate Plans.

If my Estate is small, do I need a Will?
If you don’t have a Will, the state has one for you. Laws are enacted in each state to determine what will be done with the assets of an individual who dies without a Will (“intestate”). Unfortunately, the state’s “Will” does not take into account your personal values, Christian commitment, goals, family situation, or needs. A Will enables you to decide who will become the next “steward” of the resources God has entrusted to you.

How do I provide for my children’s care after I’m gone?
In your Will, you can name the person you would like to be the Guardian of your children. The Guardian has responsibility for the physical care of your children. By naming a Guardian in your Will, you, rather than the local court, can decide who should care for your children if something happens to you. Your children’s financial needs can be met by creating a Children’s Trust in your Will. It holds all of your assets for your children’s benefit until they have reached the level of education you want to provide for them and are mature enough to handle an outright distribution from your Estate. In creating a Trust, you must appoint a person to be in charge of the Trust, called a Trustee. Your Trustee will invest the assets in the Trust and make decisions about their distribution to your children.

Should I consider a Living Trust?
For many people a Revocable Living Trust is an excellent way to implement their Estate Plan. Like a Will, a Trust makes provision for the transfer of your assets at death. Unlike a Will, assets in the Trust are not subject to the costs and delays of probate. During your lifetime, it remains completely under your control.If structured and funded properly, the use of a Revocable Living Trust can eliminate court costs (except in an unusual situation); lower the amount of attorney time needed to administer your Estate, thus lowering attorney fees; and avoid time delays. In most situations, the successor Trustee can assume management of the Trust immediately. The payment of final bills, collection of insurance monies, sale of appropriate assets, etc., can be done very quickly. The actual time it takes to “administer the Estate of the decedent” by means of a Living Trust often can be reduced by half, as compared with the probate process.On the other hand, Trusts are not for everyone. Because of the added initial cost, funding requirements and other issues, some people prefer a Will for their primary Estate Planning document. Even with the Trust, it is recommended that you have a Will, often called a “pour-over” Will to cover any assets not included in the Trust at your death.

Will Barnabas Foundation do my legal work?
Barnabas Foundation will assist you in producing a plan that you can take to your local attorney to implement. While we assist you with your Estate Plan, we do not provide legal advice. It is important that your own attorney be involved in this planning process.

What is the Hidden Double Tax?
Hidden double tax refers to the tax liability due on tax-deferred benefits at the time of death. Both income tax and Estate tax may become requirements. Your tax-deferred benefits could be taxed at rates that could total between 15 and 70 percent.

How Does It Happen?
Almost everyone today has some form of tax-deferred retirement program because of the tax advantages these programs provide. Retirement money is often a combination of employer-provided pension, profit sharing plans, personal IRA’s, KEOGH’s, annuities, etc.The problem is that “tax-deferred” means exactly that. The tax is not eliminated; it is merely delayed until the money is withdrawn during your lifetime or by your children after your death.Any retirement funds remaining at death are included with your other assets for Federal Estate Tax purposes. Retirement fund assets are also subject to income taxes when they are received by your children. For people in the highest tax brackets, the double tax can send more than 70 cents of each dollar to the Federal government! State taxes may further shrink the amount received by your children to about 25 cents on the dollar.

How Can It Be Eliminated?
There are two ways to eliminate the double tax while assuring that retirement funds will be available for you and your spouse until death:The most direct method is to change the final beneficiary to a specific Christian charity, after you and your spouse. This means that all funds remaining (tax-deferred assets) after the death of both spouses will go to the charity you have chosen.The other way is to indicate in your Will or Trust that you wish to leave a portion of your Estate to Christian causes, and that the assets used for this gift should be those that have not previously been subject to income tax (known legally as “Income In Respect Of a Decedent”).Either way, all tax-deferred retirement funds remaining at death can be entirely excluded from both income and Estate taxes. The Will or Trust method, since it is broader in scope, has the added potential to eliminate double taxes on other assets as well.Neither method is difficult to implement but must be structured properly to maximize the benefits. However, due in part to a lack of information about the benefits of giving tax-deferred assets, many planning professionals are not fully aware of how to apply these advantages to particular Estate Plans. Barnabas Foundation professionals are willing to assist you and your advisors in making sure your plan eliminates the double tax.

Contact Barnabas Foundation to see if you are a candidate for these substantial tax savings by calling 1-888-448-3040.

▾ Estate Planning Checklist

How does your checklist look?

One of the many confidential services offered by Barnabas Foundation at no charge or obligation to you is the opportunity to discuss issues relating to your Estate Planning. We have extensive experience in helping families meet a wide variety of other Estate and tax planning needs.

Through this planning process with Barnabas Foundation, you also will discover distinctive ways of supporting your favorite Christian charities during your lifetime and after your death.

First Wills are usually prepared when there are young children in a family whose needs include passing property to the surviving spouse and naming a Guardian/Trustee to care for and protect children. As children reach maturity, different concerns will emerge about one’s Estate. Wills and Estate Plans that were once adequate must be updated to meet new challenges and circumstances.

No “one-size-fits-all” solution meets the planning needs of every Christian. This Planning Guide provides a convenient way to assess your own situation and plan accordingly (use it with your own planning advisers to help meet your goals).

Do I have …

An up-to-date Will or Living Trust?
As your planning needs change over the years, your Will should be updated to manage these changes. A Living Trust disposes of property in much the same way as a Will, while providing other benefits. A Living Trust is a simple and flexible way for you to hold and manage your property. It will also allow for others to act on your behalf at any time it may become necessary. If the Trust contains all your property, then the Estate passes free of probate.

A Durable Power of Attorney?
Through this document, you appoint a person to manage your property if you become incapacitated. A Power of Attorney applies to property that you have not transferred into a Trust. Formal guardianships on your behalf are normally made unnecessary by this action.

A Living Will?
Most states now authorize you to make a statement of your desires regarding medical treatment if you become terminally ill. Preferences about the use of “heroic efforts” and artificial life supports are frequently included.

A Health Care Power of Attorney?
This document allows you to appoint a person to be your representative in making medical decisions for you at any time you are unable to make them yourself.

▾ Charitable Gift Annuity

A Charitable Gift Annuity is a contract between you and a charity that provides guaranteed fixed payments for life. You receive a charitable deduction at the time of funding the Charitable Gift Annuity, and the annual payment percentage is based on your age at the time the gift is made. In addition, a portion of each payment is tax-free. At death, the charity receives the balance of the annuity.

A Gift Annuity can be created for an individual or a married couple. Payments are then arranged for either the life of the individual or for the lives of both a husband and wife. The annuity rate for couples is somewhat lower than the rate for a single person.

Barnabas Foundation issues Charitable Gift Annuities for the support of its member organizations. An advantage of using Barnabas Foundation for your Charitable Gift Annuities is that distributions can support more than one charity.

Gift Annuity Benefits:

  • A fixed income to you for your lifetime
  • Immediate income tax deduction for the charitable value of the Gift Annuity
  • A portion of the annual income payments you receive is tax-exempt, resulting in a higher effective rate of return.
  • Money in a Gift Annuity is not generally included in your estate for tax purposes

Gift Annuity Rates Effective on January 1, 2012.*

*Remember that these are maximum rates. Donors can always request a lower rate, get a bigger charitable deduction, and help their favorite charities even more.

Single Life

New Suggested Maximum Rate Schedules Effective January 1, 2012
Approved by the American Council on Gift Annuities on November 7, 2011
Suggested Charitable Gift Annuity Rates

Age Rate Age Rate Age Rate
5-10 2.0 50 3.7 73 5.5
11-15 2.1 51-52 3.8 74 5.7
16-19 2.2 53-54 3.9 75 5.8
20-23 2.3 55 4.0 76 6.0
24-26 2.4 56-57 4.1 77 6.2
27-29 2.5 58 4.2 78 6.4
30-32 2.6 59 4.3 79 6.6
33-34 2.7 60-61 4.4 80 6.8
35-36 2.8 62-63 4.5 81 7.0
37-38 2.9 64 4.6 82 7.2
39-40 3.0 65 4.7 83 7.4
41-42 3.1 66-67 4.8 84 7.6
43 3.2 68 4.9 85 7.8
44-45 3.3 69 5.0 86 8.0
46 3.4 70 5.1 87 8.2
47 3.5 71 5.3 88 8.4
48-49 3.6 72 5.4 89 8.7
90+ 9.0

Notes:

  1. The rates are for ages at the nearest birthday.
  2. For immediate gift annuities, these rates will result in a charitable deduction of at least 10% if the CMFR is 1.4% or higher and a quarterly payment frequency is used. If the CMFR is less than 1.4%, the deduction will be less than 10% when annuitants are below certain ages.
  3. For deferred gift annuities with longer deferral periods, the rates may not pass the 10% test when the CMFR is low.
  4. To avoid adverse tax consequences, the charity should reduce the gift annuity rate to whatever level is necessary to generate a charitable deduction in excess of 10%.

Two Life

New Suggested Maximum Rate Schedules Effective January 1, 2012
Approved by the American Council on Gift Annuities on November 7, 2011
Suggested Charitable Gift Annuity Rates

Younger Age Older Age Rate
5 5-95+ 1.8
6 6-95+ 1.8
7 7-95+ 1.8
8 8-95+ 1.8
9 9-95+ 1.8
10 10-95+ 1.8
11 11-95+ 1.9
12 12-95+ 1.9
13 13-95+ 1.9
14 14-95+ 1.9
15 15-95+ 1.9
16 16-95+ 2.0
17 17-95+ 2.0
18 18-95+ 2.0
19 19-95+ 2.0
20 20-95+ 2.1
21 21-95+ 2.1
22 22-95+ 2.1
23 23-95+ 2.1
24 24-95+ 2.1
25 25-95+ 2.2
26 26-95+ 2.2
27 27-95+ 2.2
28 28-95+ 2.2
29 29-95+ 2.3
30 30-95+ 2.3
31 31-95+ 2.3
32 32-95+ 2.3
33 33-95+ 2.4
34 34-95+ 2.4
35 35-95+ 2.4
36 36-95+ 2.5
37 37-95+ 2.5
38 38-95+ 2.5
39 39-95+ 2.6
40 40-95+ 2.6
41 41-95+ 2.7
42 42-95+ 2.7
43 43-95+ 2.8
44 44-95+ 2.8
45 45-95+ 2.9
46 46-95+ 2.9
47 47-50 3.0
47 51-95+ 3.1
48 48 3.0
48 49-95+ 3.1
49 49-51 3.1
49 52-95+ 3.2
50 50 3.1
50 51-53 3.2
50 54-95+ 3.3
51 51-52 3.2
51 53-55 3.3
51 56-95+ 3.4
52 52-54 3.3
52 55-95+ 3.4
53 53-55 3.4
53 56-58 3.5
53 59-95+ 3.6
54 54 3.4
54 55-57 3.5
54 58-95+ 3.6
55 55 3.5
55 56-58 3.6
55 59-61 3.7
55 62-95+ 3.8
56 56-57 3.6
56 58-59 3.7
56 60-62 3.8
56 63-95+ 3.9
57 57-58 3.7
57 59-63 3.8
57 64-95+ 3.9
58 58-61 3.8
58 62-65 3.9
58 66-95+ 4.0
59 59-60 3.8
59 61-63 3.9
59 64-68 4.0
59 69-95+ 4.1
60 60-62 3.9
60 63-66 4.0
60 67-70 4.1
60 71-95+ 4.2
61 61 3.9
61 62-64 4.0
61 65-68 4.1
61 69-95+ 4.2
62 62-63 4.0
62 64-66 4.1
62 67-69 4.2
62 70-95+ 4.3
63 63-64 4.1
63 65-67 4.2
63 68-95+ 4.3
Younger Age Older Age Rate
64 64-66 4.2
64 67-70 4.3
64 71-95+ 4.4
65 65 4.2
65 66-68 4.3
65 69-72 4.4
65 73-95+ 4.5
66 66-67 4.3
66 68-71 4.4
66 72-75 4.5
66 76-95+ 4.6
67 67-69 4.4
67 70-73 4.5
67 74-95+ 4.6
68 68 4.4
68 69-71 4.5
68 72-75 4.6
68 76-95+ 4.7
69 69-70 4.5
69 71-73 4.6
69 74-76 4.7
69 77-95+ 4.8
70 70-71 4.6
70 72-74 4.7
70 75-78 4.8
70 79-95+ 4.9
71 71-73 4.7
71 74-75 4.8
71 76-79 4.9
71 80-82 5.0
71 83-95+ 5.1
72 72 4.7
72 73-74 4.8
72 75-76 4.9
72 77-79 5.0
72 80-83 5.1
72 84-95+ 5.2
73 73 4.8
73 74-75 4.9
73 76-77 5.0
73 78-80 5.1
73 81-83 5.2
73 84-95+ 5.3
74 74 4.9
74 75-76 5.0
74 77-78 5.1
74 79-80 5.2
74 81-83 5.3
74 84-87 5.4
74 88-95+ 5.5
75 75 5.0
75 76-77 5.1
75 78 5.2
75 79-81 5.3
75 82-83 5.4
75 84-86 5.5
75 87-95+ 5.6
76 76-77 5.2
76 78-79 5.3
76 80-81 5.4
76 82-83 5.5
76 84-85 5.6
76 86-88 5.7
76 89-95+ 5.8
77 77-78 5.3
77 79 5.4
77 80-81 5.5
77 82-83 5.6
77 84-85 5.7
77 86-87 5.8
77 88-91 5.9
77 92-95+ 6.0
78 78 5.4
78 79 5.5
78 80-81 5.6
78 82-83 5.7
78 84 5.8
78 85-86 5.9
78 87-89 6.0
78 90-92 6.1
78 93-95+ 6.2
79 79-80 5.6
79 81 5.7
79 82 5.8
79 83-84 5.9
79 85-86 6.0
79 87-88 6.1
79 89-90 6.2
79 91-93 6.3
79 94-95+ 6.4
Younger Age Older Age Rate
80 80 5.7
80 81 5.8
80 82 5.9
80 83-84 6.0
80 85 6.1
80 86-87 6.2
80 88-89 6.3
80 90-91 6.4
80 92-93 6.5
80 94-95+ 6.6
81 81 5.9
81 82 6.0
81 83 6.1
81 84-85 6.2
81 86 6.3
81 87-88 6.4
81 89 6.5
81 90-91 6.6
81 92-94 6.7
81 95+ 6.8
82 82 6.1
82 83 6.2
82 84 6.3
82 85-86 6.4
82 87 6.5
82 88 6.6
82 89-90 6.7
82 91 6.8
82 92-93 6.9
82 94-95+ 7.0
83 83 6.3
83 84 6.4
83 85 6.5
83 86 6.6
83 87 6.7
83 88-89 6.8
83 90 6.9
83 91 7.0
83 92-93 7.1
83 94-95+ 7.2
84 84 6.5
84 85 6.6
84 86 6.7
84 87 6.8
84 88 6.9
84 89 7.0
84 90 7.1
84 91 7.2
84 92-93 7.3
84 94-95+ 7.4
85 85 6.7
85 86 6.9
85 87 7.0
85 88 7.1
85 89 7.2
85 90 7.3
85 91 7.4
85 92 7.5
85 93-95+ 7.6
86 86 7.0
86 87 7.1
86 88 7.3
86 89 7.4
86 90 7.5
86 91 7.6
86 92 7.7
86 93-95+ 7.8
87 87 7.3
87 88 7.4
87 89 7.5
87 90 7.7
87 91 7.8
87 92 7.9
87 93-95+ 8.0
88 88 7.6
88 89 7.7
88 90 7.9
88 91 8.0
88 92 8.1
88 93-95+ 8.2
89 89 7.9
89 90 8.0
89 91 8.2
89 92 8.3
89 93-95+ 8.5
90 90 8.2
90 91 8.4
90 92 8.5
90 93 8.7
90 94-95+ 8.8
91 91 8.6
91 92 8.7
91 93-95+ 8.8
92 92-95+ 8.8
93 93-95+ 8.8
94 94-95+ 8.8
95+ 95+ 8.8

NOTES:

  1. The rates are for ages at the nearest birthday.
  2. For immediate gift annuities, these rates will result in a charitable deduction of at least 10% if the CMFR is 1.4% or higher and a quarterly payment frequency is used. If the CMFR is less than 1.4%, the deduction will be less than 10% when annuitants are below certain ages.
  3. For deferred gift annuities with longer deferral periods, the rates may not pass the 10% test when the CMFR is low.
  4. To avoid adverse tax consequences, the charity should reduce the gift annuity rate to whatever level is necessary to generate a charitable deduction in excess of 10%.

▾ Charitable Remainder Trust

A Charitable Remainder Trust (CRT) is an arrangement which provides for payments to you for life or a specified period of years. At the end of the trust term, the remaining balance in the Trust is distributed to qualified charities of your choice. You receive a charitable tax deduction at the time of the gift to the Trust.

Unlike Charitable Gift Annuities, you select your annual payout at the time the Trust is created. The minimum percentage selected must be at least 5%. The maximum allowable percentage depends on your age or the term of the Trust.

If an appreciated asset, such as stock or real estate, is given to charity, prior to sale, it will yield a charitable deduction based upon the current fair market value of the asset. By giving an appreciated asset to a CRT, you will receive a payout based on the full value of the property placed in the CRT, without any reduction for taxes that otherwise would have been paid if you sold the property and the net after-tax proceeds were invested.

An alternative to establishing a CRT during your life is to provide an income interest for children or grandchildren after your death through the use of a CRT. This type of gift can be utilized to reduce the death tax in your estate while providing an income to family members on a portion of your estate.

Charitable Remainder Trust Benefits:

  • Annual payments to you for your lifetime or a term of years.
  • Immediate income tax deduction based upon the value of the remainder interest of the Trust.
  • The remainder interest which passes to charity is not subject to estate tax.
  • If funded with appreciate assets, you avoid the immediate realization of capital gain tax.
  • Charitable Trusts must be administered according to a set of strict IRS requirements.

Because Barnabas Foundation has the expertise to provide this service, we often serve as Trustee for Charitable Trusts.

▾ Non-Cash Gifts

Any asset that you own may potentially become a charitable gift.

Most gifts received by charities are in the form of cash, even though this is not always the most tax-efficient way to give. It may surprise you to know that almost any asset may become a charitable gift. You may contribute:

  • Stock or other securities
  • Real estate
  • Business interests
  • Life insurance
  • Tangible personal property
  • Grain or other commodities
  • IRA or other retirement assets
  • Bequest from a Will or Trust

The federal tax law makes gifts of assets that have grown in value more advantageous than giving cash. The benefits of giving an appreciated gift are:

Appreciation on charitable gifts is usually not subject to capital gains tax. You receive a tax deduction for the fair market value of the gift.

With these benefits, it will actually cost you less to give a gift of appreciated assets than if you give cash.

Since certain restrictions and requirements surround the giving of each type of asset, Bible League International has partnered with Barnabas Foundation to assist in completing these gifts. They can help you give the asset that works best for your situation and your conversations with them are confidential and offered at no cost to you.

▾ Giving During Your Lifetime

Barnabas Foundation’s Stewards Fund, a donor-advised fund, is one of the best ways to maximize and simplify charitable giving. In fact, many have found that using a Steward’s Fund restores or increases the joy of giving – and God loves cheerful givers! (2 Corinthians 9:7)

  • The Stewards Fund enables a donor to make a one-time gift to Barnabas Foundation and decide later how the gift will be distributed to the donor’s favorite charities.
  • The donor receives an immediate tax benefit and has plenty of time to determine which charities to support.
  • The Stewards Fund also provides the flexibility to ensure that gifts are applied in the most effective way.
  • A donor can give appreciated assets, like stock; arrange for the sale of a business; or use the Fund as an alternative to a family foundation.
  • The Stewards Fund accommodates many charitable gift opportunities, and also allows the donor to designate multiple charities from a single gift.
  • A Stewards Fund account can be established by contributing a number of different types of assets. There is no set-up fee for this account and individuals may gain tax benefits as well, depending on the asset(s) they contribute.

Suggestions for Charitable Giving in Estate Plans

  • Giving a tithe of your Estate to charity When planning for the future allocation of your Estate, you can use the occasion to reinforce the importance of the biblical concept of a tithe to your family. For example, if a couple with four children had an Estate of $600,000, a tithe of the Estate would provide $60,000 for charity and $540,000 to their children, or approximately $135,000 for each child.
  • “Child Named Charity” The concept of a “Child Named Charity” actually was presented to Barnabas Foundation by a couple who had lost a child and wanted that child’s share to go to their favorite Christian charities. It has become a popular way for many people to distribute gifts from their Estate. For example, if a couple has four children and wants to include a “Child Named Charity” in their plans, they would divide their Estate five ways: one-fifth to each child and one-fifth to their favorite Christian organizations. A “Child Named Charity” makes a strong statement to family members about your commitment to Christian causes. At the same time, it still provides a substantial portion of your Estate for your children.
  • How much is enough? Determining how much inheritance is enough for your children and grandchildren is a challenging but important process. Christians usually wish to determine an appropriate amount which will help but not harm them and then leave the remainder to Christian charities. For example, a husband and wife with two children have an Estate valued at $650,000. They decide that a $250,000 inheritance is an appropriate amount for each of their children. This is an inheritance that will allow them to help fund their grandchildren’s college education and help their children plan for their own retirement. The remaining $150,000 will go to their favorite charities which they have supported their entire adult lives.
  • Giving most/all to Christian causes Sometimes Christians decide to leave most or all of their Estate to Christian charities. In some cases, the children of people who choose this option have substantially more assets than their parents, or they may have made lifestyle or financial choices that would make it undesirable to give them any more assets. Others who do not have children or other family members they wish to remember with a bequest may leave their entire Estate to the charities of their choice. No matter what type of bequest you choose, we encourage you to notify the charities you have selected to make sure that your gift will be credited and used properly. If a charitable organization knows about your bequest and has made provisions for it, it is more likely that your gift will be handled and acknowledged according to your wishes.

▾ Life Story Testimonials

Apple of the Teacher’s Eye

“People just do not realize the benefits of a Charitable Gift Annuity!” was Madelyn De Groot’s comment. “They just do not know.”

Having shared knowledge her entire 25 years as a teacher, Madelyn leaves an incredible legacy. She wanted other Christians to recognize the value this giving opportunity represents.

For Madelyn, a Gift Annuity was a great way to give. She received an immediate tax deduction while getting increased income for life, with the remainder going to her favorite Christian causes. Barnabas Foundation is a good option for gift annuities because she was able to support several different Christian organizations with a single Gift Annuity.

Madelyn used Gift Annuities for years because she recognized a number of Charitable Gift Annuity benefits:

  • An immediate tax deduction
  • Substantially higher income than from her CD’s
  • A portion of the income is tax-free
  • Several favorite charities will benefit at her death

She was always quick to recognize that it’s important to give during your lifetime. Madelyn said, “You have to think of the Lord’s work first. My four children, all grown and married, are pretty well set. They told me to manage the gifts God has given me in the way I felt led.”

Madelyn went on to marvel at the great opportunities that young people have today versus her years during the depression. “Too many people worry about having enough money rather than trusting in the Lord to provide.” Madelyn is still a great teacher in the legacy that she leaves!

SPECIAL NOTE: Madelyn went to her heavenly home on August 28, 2010. Her family wishes to continue to recognize her outstanding example of a Christian steward.

A Business Built by the Lord

Just a small service station on a corner in South Holland, a few yellow school buses parked behind, an inauspicious beginning for one of the great stories of how the Lord works through His people.

After a stint in the military, Terry Van Der Aa joined his Dad and brother and three mechanics in keeping the fleet on the road. It was the family business so it was natural to simply step in.

Terry and Linda were married in 1970. Just three years later, his Dad sold the business to the boys on a 20 year contract. Then began the process of acquisition. First a small company, then another and another. Just five years into the contract, the business was thriving and Mom and Dad were paid off.

During the 80’s the process continued with several large acquisitions each year. Near the end of the decade, the company moved from a regional powerhouse to a national contender with a major acquisition on Long Island, NY. And in the 90’s, the company became an international firm with an acquisition in the Netherlands. While Terry is reluctant to claim the title of the world’s largest family-owned bus company, he is certain that there were no larger bus companies in the United States.

In the late 90’s, with a run up in corporate valuations and a strong stock market, the offer by Laidlaw to buy the company was simply too good to pass up. Terry credits Bill Terpstra, his mentor, with helping to make the decision to sell.

He credits his parents with instilling a legacy of tithing. First, the business tithed on all profits and then Terry and Linda tithed on their income. And the Lord saw fit to bless them. That is why Terry insists on giving credit to the Lord for building the business.

While Terry was growing the business, Linda was busy with raising their three children. Today, both Terry and Linda enjoy their time with their children and grandchildren.

When asked about the role of Barnabas Foundation, Terry made an interesting observation. He said, “Just because the timing is right to sell a business, does not mean that the timing is right to give to certain causes. Barnabas Foundation was very helpful in assisting us in making the most tax-efficient gifts in connection with the sale of our business. They were a great resource for us in facilitating our charitable goals at an important time in our life.” Terry and Linda have used their Donor-Advised (Stewards Fund) account instead of setting up their own private  foundation to help bridge the gap.

Their Stewards Fund Account allows them to make tax-efficient donations to Barnabas Foundation that eventually benefit multiple charities. “Barnabas Foundation really simplifies our charitable giving; this is why we utilize the Stewards Fund instead of establishing our own foundation!” Terry and Linda use the online E-grant Recommendation System to recommend grants to their  favorite charities found on the Barnabas Foundation website.

Terry and Linda also established a Charitable Remainder Trust in connection with the sale of their business. The Trust allowed them to defer capital gains taxes, receive an income stream for life and support some of their favorite charitable organizations after they have passed on.

We praise the Lord for hundreds of Terrys and Lindas who use Barnabas Foundation’s expertise to accomplish their financial goals and also to help in growing God’s Kingdom.

Testing the Water

Jim and Millie Van Prooyen have been active Christians all of their married lives. Jim says, “We didn’t know there was any other way.” When they married they knew that tithing would naturally be part of their lifestyle and that their kids would attend Christian school.

Their four grown children are now self-sufficient, involved with their own families and supporting their churches. In fact, Jim and Millie’s church in Highland, Indiana is the benefactor of the gifts of two of these families. Thus, the legacy continues.

Jim’s career included a home furnishing business in Highland, Indiana, which he sold in order to retire for all of 8 months! He and several partners had established the Bank of Highland which then became Sandridge Bank with a number of branches. Jim took on the challenge of the bank’s commercial loan department for the decade prior to his second retirement in 1999 when the bank sold.

As a result of the bank buy-out, Jim acquired a substantial amount of appreciated stock. Concerned about the tax consequence, he needed a way to diversify his holdings or as Jim says, “I needed a way to separate what I had and not have so many eggs in one basket.” Jim had a financial consulting company prepare a proposal – and he worked with Barnabas Foundation to develop a plan. In Jim’s words, “He decided to test the waters.”

After seeing the Barnabas Foundation design of his Charitable Remainder Trust, Jim had confidence that “this was the way to go.” Jim and Millie were able to achieve their goals…

  • to take care of their family
  • to take care of their church
  • to pass support on to “local” causes, i.e. Christian school
  • to receive an immediate income tax deduction
  • to avoid immediate realization of capital gains tax

When asked what Jim considers the best thing about his Charitable Remainder Trust, he said, “It firms up the amount of income we have (a percentage of the trust). Add that to the social security we get and it helps me plan and control. It’s a great income planning tool.”

Jim also enjoys a Stewards Fund account, the donor-advised fund at Barnabas Foundation. He gives stock, which is sold, and the proceeds are held in the Stewards Fund account. Then when a favorite Christian ministry needs funding, Jim can recommend a grant. He particularly likes the time and flexibility benefits of the Stewards Fund.

“Asking Barnabas Foundation to review our Wills was especially helpful,” adds Jim. “Their professional opinions and recommendations made a difference in how we structured our estate plan, saved on taxes and in our ability to contribute to the Christian causes that are important to us.”

▾ IRS Information

Helpful Links to Forms and Publications

Forms and Instructions:
http://www.irs.ustreas.gov/app/picklist/list/formsInstructions.html

Charitable Contributions:
http://www.irs.gov/pub/irs-pdf/p526.pdf

Special IRS Publication 1771 – Charitable Contributions:
http://www.irs.gov/pub/irs-pdf/p1771.pdf
Substantiation and Disclosure Requirements explains the federal law for organizations such as charities and churches who receive tax-deductible charitable contributions and for taxpayers who make contributions.

The Internal Revenue Service recently released “Tax Guide for Churches and Religious Organizations,” IRS Publication 1828.
http://www.irs.gov/pub/irs-pdf/p1828.pdf
The guide explains the benefits and responsibilities under the Federal tax system of churches and other religious organizations. Topics include tax-exempt status (and jeopardizing same) and issues of unrelated business income and political campaign involvement, to name a few.

▾ Glossary

Estate Planning and Planned Giving Terms

Estate Planning is part of our spiritual responsibility for the assets God has entrusted to us. When we realize that everything we own actually belongs to God and we are simply His caretakers or stewards, we understand the importance of making sure that those assets are passed on in a way that honors God and furthers His kingdom.

Asset
Property to which a value can be assigned; the property owned by a person or organization. In legal terms, the property of a person that can be taken by law for the settlement of debts or that forms part of a person’s Estate

Beneficiary
An individual designated to receive benefits or funds under a Will or Trust, or other contract, such as an insurance policy, Trust or retirement plan.

Bequest
To give or leave something by Will or Trust; typically personal property, cash or other assets.

Capital Gain Tax
A separate tax charged on the profit from the sale of an asset that was purchased at a lower price. For instance, if an individual purchases stock for $100, then sells that stock for $500, he or she will pay capital gain tax on the profit of $400. Capital gain tax rates are usually different than income tax rates.

Charitable Remainder Trust
A Trust created by a donor that makes payments to the individual(s) for life or a period of years. At the end of the Trust term, the remaining balance in the Trust is distributed to charity. The donor receives a charitable tax deduction at the time of the gift to the Trust.

Charitable Lead Trust
A Trust designed to reduce beneficiaries’ taxable income by first donating a portion of the Trust’s income to charity. Then, after a specified period of time, the remainder of the Trust is transferred to the beneficiaries who typically face lower taxes.

Children’s Trust
A Trust generally established at death through a Will or Trust. This type of Trust often has “rules” for how and when Trust proceeds will be distributed to children. A typical Children’s Trust will distribute as much money as necessary for the care, support and education of the children. Often, when the children reach a certain age, the balance of the Trust assets are distributed to them for their personal use.

Corporate Fiduciary
An institution that acts for the benefit of another. One example is a bank acting as Trustee.

Double Tax Asset
Many people have retirement assets such as an IRA or 401(k). The withdrawal from these accounts is subject to income tax. If such an asset is left to loved ones, they too will pay income tax on the amounts they withdraw from the accounts. If the Estate is large enough that it is subject to Estate tax upon death, the retirement assets will be taxed twice – once upon death and again when funds are withdrawn. If retirement assets are used to satisfy charitable bequests, both income tax and Estate tax will be eliminated on these assets.

Estate Tax
A tax imposed at one’s death on the transfer of property.

Executor (or Personal Representative)
The person named in a Will to manage one’s Estate after death. This person will collect the property, pay any debt and distribute property or assets according to the Will.

Fiduciary
A person or institution legally responsible for the management, investment and distribution of funds. Examples include Trustees, executors and administrators.

Gift Annuity
A contract between a donor and a charity that provides the donor with guaranteed fixed payments for life. The donor receives a charitable deduction at the time of funding the Gift Annuity, and the annual payment percentage is based on the donor’s age at the time the gift is made. In addition, a portion of each payment is tax-free. Upon the death of the donor, the charity receives the balance of the annuity.

Gift Tax
Tax on gifts generally paid by the person making the gift rather than the recipient.

Guardian
An individual legally appointed to manage the rights and/or property of a person incapable of taking care of his or her own affairs.

Income In Respect Of a Decedent
The portion of your Estate designated for Christian causes where the assets used for the charitable gift should be those that have not previously been subject to income tax.

Intestate
A person who dies intestate has no Will, and the State then designates how personal property and assets will be distributed.

Joint Ownership
The ownership of property by two or more people, often with the right of survivorship. The survivor thus ends up owning the property outright upon the death of the other party.

Living Will
A Living Will is a document that allows a person to explain the type of medical treatment that they wish to receive in the event of a terminal illness where death is imminent. A Living Will often indicates when life support, hydration or nutrition may be removed. Laws governing Living Wills vary by state.

Marital Deduction
A deduction allowing for the unlimited transfer of any or all property from one spouse to the other, generally free of Estate and gift taxes.

Power of Attorney for Health Care
A document that authorizes another person (an advocate) to make health care decisions for an individual if he or she is incapable of making their own decisions.

Power of Attorney for Property
A document that authorizes a person (described as the agent) to conduct financial transactions for another individual. The agent’s power can be restricted within the document. A Durable Power of Attorney for Property is valid even if the individual becomes incapacitated.

Probate
Probate is the legal process of settling a person’s Estate, specifically to resolve all claims and distribute the person’s property under the valid Will. Probate protects the individual’s instructions, confirms the executor as the personal representative of the Estate, protects the interests of family members who may have claims against the Estate, and protects the executor against claims and law suits.

Revocable Living Trust
An Estate Planning tool that provides for the convenient administration of the assets in an individual’s Estate without the necessity of court supervision. When assets are transferred into a Revocable Living Trust (a process called “funding”), the Trustee can manage the assets in the event of the individual’s incapacity or death. This type of Trust is often used to avoid the probate court process and can also be used to provide ongoing management of assets after one’s death. A Revocable Living Trust can be amended or revoked until such time as the individual is incapacitated or deceased.

Testamentary Trust
A Trust that is created upon death by the terms of a person’s Will.

Trustee
The individual or institution entrusted with the duty of managing property placed in the Trust. A “co-trustee” serves as trustee with another. A “contingent trustee” becomes Trustee upon the occurrence of a specified future event.

Will
Often referred to as a “Last Will and Testament,” a Will is a final statement of one’s wishes regarding the assets in one’s Estate. A Will does not eliminate the need for probate court intervention, as many people mistakenly believe, but it gives the probate court direction as to how the assets should be distributed. In most states, a Will is the document used to name guardians of minor children.