In our last newsletter, we spoke of this present season of wealth transfer taking place between generations. The dollar figure being cited there is unprecedented, and where this accumulated wealth has come to reside in any given wealth portfolio is equally profound.  Business ventures we would now seek to succeed for example are often a component of these portfolios, and typically with that, royalties on intellectual property to the original owners. There is also often a complex mix of assets that can be subject to significant taxes, including capital gains taxes on long-term growth assets (those held for more than one year). 

Thus, as we then set upon our estate and legacy planning and contemplate the incredible power for good that can reside in these plans for future generations, we should strive for optimum benefit from every dollar. In short, we should set upon planning that preserves capital, by, for one, allowing the ministries we cherish to “compete for the IRS’s (otherwise) share of our estate.”  In so doing, we can create a “balancing effect” between what we would leave to heirs, as well as cherished ministries.  

Achieving this optimum benefit of lesser taxes, and preserved capital, however, is not automatic.  It requires careful planning that is guided by expert counsel, including seasoned financial and tax advisors who are complemented by an equally competent and experienced professional in charitable gift planning, one who is also a Fiduciary and is held to the same standard of best practice – a role we have been chartered to play here in the LeTourneau University Foundation. 

What makes this planning time sensitive? Consider that the unprecedented tax cuts that passed in 2017 will soon expire, and while the full impact of that is yet to be seen, two dynamics appear certain:  

• The “Standard Deduction” (the amount your family’s eligible expenses must be above in order to itemize them) will shrink - to roughly half of its current amount.  This could be a positive, as it may well make certain expenses, including charitable giving, once again capable of being itemized - reducing your taxable income, and thus your resulting taxes.  
• Yet another provision that will sunset is the threshold at which estate tax comes into play.  Under this expiring provision, fewer estates have been exposed to estate tax (because the threshold at which this applied had been raised). Careful planning for what this could mean should this threshold be reduced is essential, because estate taxes can erode what would otherwise be available for distribution to both heirs and the ministries your family has been impacted by.

The LeTourneau University Foundation can come alongside you and your advisors and assist you in navigating the complexities of all we just highlighted.  Our offered assistance, first and foremost, would be with your estate and legacy planning - and only then, as you feel led, the giving you may have it within your heart to accomplish, professionally, objectively, and with a keen level of sensitivity. 

In closing, may I say, take care of your families, and complete your estate and contingency planning,  and speak into their lives by telling them of the “hope that resides within you,” and how the Lord granted you wisdom and insight throughout your life as you sought to be faithful and obedient to Him.  Then, in follow through, consider empowering God’s testimony of faithfulness in your life, by providing pathways to obedience from those that will follow you – specifically in how you structure your bequests. 

There is power for good within your estate and legacy planning, but only if you plan for it and release it!