How to Change Lives with Your Stewardship
Smart Stewardship certainly makes an impact in our world today!
As we examine our stewardship priorities, it is important to ask ourselves some important questions regarding our savings and various investments:
- How much is enough and how much is too much?
- Will your children and extended family benefit or be harmed by inheriting great wealth?
- Will your children truly need the funds and wealth you leave behind?
- Do your heirs have the wisdom and maturity to carefully manage what you have built up over the years?
- How do you want to be remembered?
As Christians, we have the opportunity to leave a legacy of significance in the lives of our families and churches. Plan to make a difference now, there’s no need to wait until the Lord calls you home. Demonstrate smart stewardship for your children to see and hopefully one day emulate.
Ways to Give Apart from Cash:
Smart stewardship also involves way to give charitably while saving on taxes! For anyone over age 70 ½ who has an IRA – you can give to Christian ministry directly from your IRAs with a Qualified Charitable Distribution (QCD).
A Qualified Charitable Distribution allows individuals who are 70½ years old or older to donate up to $100,000 total to one or more charities directly from a taxable IRA instead of taking their Required Minimum Distributions.
Let’s assume you have a Required Minimum Distribution (RMD) of $32,000 this year. It’s fully taxable and affects the taxes you pay on Social Security income. It may also impact the premium you are forced to pay for Medicare Part B (this is automatically deducted from your Social Security check each month). However, when you give this RMD directly to a qualified ministry, it is not taxable.
If you don’t need this cash and it just sits in checking or savings, give it away. You can make a difference in many lives if you redirect these funds to be used for eternal impact. Some set up a Christian College scholarship fund, and others pay for a week at a Christian Camp for inner-city children. There are many ways you can give! You can even split up the RMD by taking some personally, tithing some, and funding a mission that’s near to your heart.
Remember, your heart follows your money. Start giving and your heart will follow in generosity.
You can also give shares of a mutual fund or appreciated stock to your church (or another registered non-profit or charity). Some choose to give a year’s tithe in advance by giving appreciated assets from their investments. This is how many younger families can give even more generously.
Tools for Smart Stewards:
- Consider setting up your own family foundation by using a Donor Advised Fund (DAF). You can choose a name for your giving fund. Some use their family name while others choose to give more anonymously. For example, one of our team members has a DAF called “Institute for Biblical Endowment.” Other names include “The Thousand Hills Foundation,” “Summers Legacy Fund,” and “The Faust Family Foundation.”
It takes $5,000 to establish a DAF. The money is invested until you choose the charities. You can add funds at any time and give at any time. Many open the fund and add money every year. In contrast, others open their family foundation and then fund it more fully at death by naming it as a beneficiary in their IRAs and Annuities.
Remember, tax-deferred retirement accounts, like annuities, IRAs, and employer-sponsored retirement plans, are fully taxable to your heirs at your death. This can create a significant tax headache for your family. Consider giving to charities, like your local church, who are tax-exempt.
Another benefit of using your IRAs and annuities to fund ministry or DAF is the ease of updating or changing the ultimate beneficiaries. If it is in your Will, consider it “chiseled in stone.” You’ll need to pay an attorney to update your Will. However, when naming your church as a beneficiary in your IRA, the cost of an update is normally limited to the cost of a postage stamp.
Non-retirement accounts like mutual funds, stocks, and real estate are not subject to taxes when sold by your heirs at your death. This may change in the coming years as the tax code is fluid and subject to the whims of congress.
2. Charitable Remainder Trusts (CRTs) are another great tax-saving tool used by individuals with a sizable taxable estate.
3. Family Limited Partnerships are another tool available to protect wealth.
Indeed, there are many options to grow and protect a family’s wealth. But someone once said that a pile of cash is like cow manure. Piled up, it does no good and can stink. But spread out, it can do a world of good (even an eternity). Remember to put God’s wealth back into circulation. The Bible speaks of laying up for yourself treasure in heaven, and it is done through giving. Be smart and practice wise stewardship.
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” – Matthew 6:19-21
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