Gift Planning Considerations under the new SECURE Act and CARES Act

Most of us couldn't have anticipated the series of recent events that have impacted our financial security and our sense of person and community. Whether your plans have changed or not, we have a variety of resources available that could be helpful in planning for your family and ways to create your legacy. You can contact us for everything from a list of qualified advisors in your area to considerations regarding the new tax laws put into effect this year. Please see highlights below from legislation enacted to consider in your tax and philanthropic planning.

SECURE Act and CARES Act key highlights

• Higher Deduction Limits - If you itemize, you are eligible to receive a federal income tax deduction for cash charitable contributions up to 100% of your Adjusted Gross Income (AGI). Previously this was limited to 60% of AGI. For gifts using appreciated property, the AGI limitation remains at 30%.
• The minimum age remains at 70½ for making a tax-free transfer from an IRA to a charity (Qualified Charitable Distribution).
• In 2021, IRA owners age 72 and older will resume their required minimum distribution (RMD) from IRAs.
• Retirement Plan Annuities - The rules are generally expanded to permit more qualified retirement plans to offer annuity payout options
• Waiver of penalties when retirement funds are used for Coronavirus purposes
• The SECURE Act, with certain exceptions, requires that retirement funds given to nonspousal beneficiaries must be fully distributed within ten years
• New Charitable Deduction for Cash Gifts— For non- itemizers in 2020, the charitable limit was $300 per "tax unit"- meaning that those who are married and filing jointly could only get a $300 deduction. For the 2021 tax year, however, those who are married and filing jointly can take a deduction for a total of $600.

These are only some of the numerous provisions of the SECURE and CARES Acts. We welcome the opportunity to be of assistance as you consult your advisors to create or revisit a plan to ensure it meets your needs and philanthropic goals.

Lisa Bakker, Director of Planned Giving, can be reached at 312.227.7247 or lbakker@luriechildrens.org