Laurie Valentine, trust counsel for the Kentucky Baptist Foundation, and I had the recent pleasure of visiting with a husband and wife who were seeking guidance on what steps they should take to enable them to gift real estate property to create an endowment fund which would benefit two Kentucky Baptist causes they faithfully supported.
The wife of this couple attended one of the Foundation’s legacy giving seminars a few months ago, and she was inspired to think about the Christian stewardship of their cash assets and non-cash assets (home equity, life insurance, retirement assets, investments or business interests). During our seminars we share with the participants that the average person’s net worth consists of 9 percent in cash and 91 percent in non-cash assets. When hearing this statistic, participants are enlightened that their financial stewardship covers more than just the 9 percent of their cash assets.
As Laurie and I spoke with this couple, we acknowledged that cash is the most common form of charitable gift for most people. However, by giving property, a donor may receive greater tax benefits and conserve cash for other uses. Also, donors may find that they can sometimes make a larger gift at less after-tax cost by giving real estate or other non-cash property.
Most types of marketable real property may be given. Personal residences, farms, vacation homes, undeveloped land and rental property are common sources. And, it is possible to give either all or a portion of the property’s value. The property should be readily marketable, especially if the donor plans to make the gift in the form of a life income arrangement.
Giving real property is handled by deeding the property to a charitable organization such as the Kentucky Baptist Foundation. Our staff, along with a donor’s professional advisor can help evaluate the benefits of gifting real estate as well as providing guidance in securing an appraisal and other steps.
Charitable gifts of real estate often involve more tax and legal complexities than other types of donations. Over the years, however, such gifts have provided substantial benefits to both the donors and the charity. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.
Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866)489-3533; KYBaptistFoundation.org