The Ultimate Gift

Jeff Stemler, CLU, ChFC, CFP – Sr. Vice President – Advanced Planning
(Asset Marketing Systems)

“He was exactly four years, six months, five days, seven hours and forty-two minutes old when he presented himself to the venerable Gatekeeper and waited for admittance to the Glorious Kingdom of God”

So begins the story of the “Littlest Angel”.

The story goes on tell how homesick and unhappy he is in heaven. When asked what would make him happy he said he had an old box hidden under his bed and it contained the things that were most precious to him.

His wish was granted, the box was returned to him and he was very happy to once again hold his beloved box and its contents. “When Jesus was born, the Littlest Angel had no gift for Jesus… except for his memory-filled box, and at the bottom of the box a limp, tooth-marked leather strap, once worn as a collar by his mongrel dog, who had died as he had lived, in absolute love and infinite devotion.”

I first heard this story when I was in the third grade and it has stayed with me all these years. Even at that young age, I understood this was an example of unconditional love, and that battered old box was the Littlest Angel’s ultimate gift.

With Christmas upon us, the thoughts of giving and receiving gifts are all around us.  But there is one gift that can only be given with unconditional love and that is life insurance.  We have nothing materially to gain by providing life insurance for our family, but we can know in our hearts that we have kept the promises when we got married and held our babies, to protect and provide for those we love.

Just like that battered old box, our gift of life insurance is our ultimate gift to our loved ones. 

Merry Christmas.

‘Tis the Season for Giving… A Look at Qualified Charitable Distributions (QCDs)

Sam Payne, RICP, CLTC – Vice President, Business Consultant
(Asset Marketing Systems)

As we quickly approach the end of one tax year and the beginning of another, a review of Qualified Charitable Distributions (QCDs) and their application for some of your clients makes perfect sense.

Referrals, the holy grail of any enterprise, are a by-product of providing exceptional service and value to your existing clients.  So much so that they want to share you with their friends and acquaintances, and so you become referable.

Informing and educating clients who can take advantage of QCDs about them, and the benefit of doing so is one of those opportunities to add value.

What is a QCD? QCDs have been around in some form since the Pension Protection Act in 2006.  Their value changed as a result of the Tax Cuts and Jobs Act of 2015, and under current tax law, they can provide an additional benefit for tax years through 2025.  Prior to 2017, the QCDs strategic importance lay primarily in the fact that it could help older taxpayers meet their philanthropic goals while also satisfying IRA required minimum distributions (RMDs).

Since the passage of the Tax Cuts and Jobs Act and the increase in the standard deduction, many individuals find themselves in a position where total itemized deductions do not exceed the standard deduction.  So deducting charitable contributions will not have the benefit it may have had previously.

Here’s an example: 

For the 2019 tax year, a couple plans to file jointly. They are both age 75 and anticipate adjusted gross income (AGI) of $125,000, including $60,000 in RMDs. 

$125,000 total income   (including 60,000 RMD)

Standard deduction $27,000

Charitable gift $5,000  

Taxable income $98,000  ($125,000 minus standard deduction)

If the QCD was utilized, the taxable income would be $93,000 saving approximately $1,300 in taxes.

Reach out to your Business Consultant for more information on QCDs, the rules and limitations…then start talking to your clients currently receiving RMDs.  Are they giving to a charity annually, and are they utilizing the QCD? If not, show them how to!

To get more background on Qualified Charitable Distributions, watch the video below to hear Sam Payne discuss the history of QCDs along with a case study.