Bequests & Legacy Giving
Charitable gift planning is stewardship of our assets, just like our weekly offering. Please consider St. Matthew Parish in your estate planning.
The simplest planned gift to St. Matthew Church is a bequest in your last will or testament or in your living trust. This demonstrates the obvious necessity to have a valid will or trust in order to accomplish your goal of leaving a legacy to the Church as your final act of stewardship.
Even if you choose to make an outright bequest to St. Matthew’s, you may consider the parish as the beneficiary of a contingent bequest in the event all your other named beneficiaries no longer exist at the time of your death. This is sometimes referred to as a “clean up” provision. It ensures that your property is distributed according to your plan rather than the state law on estate distributions.
A tax planning point for bequests: To the extent possible, your bequest should be from assets referred to in the Internal Revenue Code as “income in respect of a decedent.” Some examples of these assets are U.S. savings bonds and retirement plans such as 401(k) plans and IRAs. Such gifts to St. Matthew are ideal because they are subject to income tax if received by a tax-paying beneficiary, such as a family member. However, since the Church like other charities, is tax-exempt, income tax can be avoided on bequests of these assets. Other assets, such as bank accounts, life insurance and corporate stocks and bonds, and real estate proper-ties which do not involve income tax shortcoming, are better assets to distribute to family members.
Bequests may take several different forms:
A bequest of a specific amount
“I give $$$ to ….”
A bequest of specific property:
“I give 100 shares of XYZ Corporation to….”
A bequest of a portion of the residue of your estate:
“I give 10 percent of the remaining property in my estate to….”
A bequest of the complete residue of your estate:
“I give all of the remaining property in my estate to.…”
If you are seriously considering a bequest or legacy contribution to St. Matthew, contact your family attorney to see how you can best give to St. Matthew’s Parish. Attorneys have information with respect to the documentation you will need.
Age 70 ½? — Make a Tax-Free Charitable Gift through Your IRA!
Normally, a distribution from your IRA is taxed as ordinary income. However, federal tax legislation enacted in December 2015, allows you, if you are 70½ or older, to make a direct gift from your IRA to the Church through your parish, the Catholic Services Appeal, the Archdiocese of Detroit Endowment Foundation, Sacred Heart Major Seminary, Catholic Charities of Southeast Michigan, or another archdiocesan institution or other qualified charity without the distribution taxed as income to you. Unlike prior years, this legislation has no expiration date.
The IRA charitable rollover law may provide a very good charitable giving vehicle if you are age 70 ½ and take the standard deduction rather than itemize deductions on your tax return. The law may also allow you to avoid a tax increase on your Social Security benefits. Thus, your IRA could be considered a special fund for distributions to the Church and charities without the normal consequences of reporting additional taxable income.
The distribution must be from your IRA, not a 401(k) or other retirement plan. However, consult with your financial or tax advisor about the possibility of transferring funds from one of these other plans to establish an IRA, with the distribution to charity coming from the newly established IRA.
The IRA distribution must be a direct charitable gift and not a distribution to a donor-advised fund, a charitable remainder trust or for a charitable gift annuity. Distributions to charity cannot exceed $100,000 in a taxable year.
To take advantage of the IRA charitable rollover to support the Church, please review the following helpful tips on how to handle your charitable gift correctly:
- Contact your IRA custodian or representative before making a gift to arrange for the proper transfer of funds from your IRA directly to the Church and other qualified charities. The check or other payment issued from the IRA must be made payable to the charity.
- If you have elected to have income tax withheld from your normal IRA distributions, advise your IRA administrator not to withhold taxes from distributions to charity.
- Consult your tax advisor for the tax reporting of the special election described above.
While this topic is fresh on your mind, ask your attorney and financial advisor how to make the Church a beneficiary of your will or trust or your IRA.
For more information about how you and the Church can benefit from an IRA charitable rollover, contact the parish office or the Archdiocese Department of Development and Stewardship at 313.596.7408, or e-mail: email@example.com.
These helpful tips are only for your information and are not to be considered as legal, tax or financial advice. You should consult with your legal, tax and financial advisors to implement the benefits of the IRA charitable rollover law and related matters.