10 Reasons NOT to Implement a Legacy Giving Plan in Your Church

Legacy Giving // April 23, 2014

How often does the topic of legacy giving come up at your church? Once a quarter? Twice a year? Better yet, what is legacy giving? Legacy giving involves a “deferred gift.” It is a gift one decides to give at a future date, either years from now or at death. It is a present decision to make a future gift.

Most people leave or bequeath these types of gifts through their will or estate plan. Unfortunately, gift planning is rarely discussed in churches across America. Why? Check the list below and tell me if your reason is somewhere on this list.

1. You feel that your church cannot efficiently use or does not need any part of the $41 trillion that will transfer from this generation to the next.

Seriously?! Researchers at Boston College estimated that $41 trillion will transfer through settled estates, during the 55-year period from 1998-2052. Consider developing a legacy gift planning strategy. Educate your people about the options for legacy plans.

2. You think that the IRS won’t receive any portion of your estate since the total value of your assets is under $5M.

Since 2011, an estate can pass along up to $5 million in assets to descendants without triggering the estate tax. Therefore, most people assume that they can leave the entirety of their estate to their heirs without paying any taxes to the IRS. (FYI: Estates that exceed the tax-free threshold of $5M may have to pay up to 55% in taxes!) However, any assets that are in tax-deferred retirement accounts (like IRA, SEP-IRA etc.) are required to pay deferred federal taxes to the IRS, when those assets are transferred to heirs or their trusts.

This tax occurs regardless of the overall size of the estate. In other words, if you have funds or if they are in an IRA at the time of your death, then those assets will be taxed at your heirs’ federal tax rate, regardless of whether your estate value is under or over the $5 million threshold.

3. Your annual ministry plan and missions budget are fully funded. You wouldn’t know what to do with the $35,000 average-sized bequest gift if you received it!

In 2006 alone, $22.91 billion was given in bequest gifts, representing almost 8% of all charitable giving that year. Bequest gifts are the most common planned gift given, representing almost 90% of all charitable planned gifts.

Did you know the average bequest gift is an estimated $35,000? Some bequests are obviously much larger. Imagine how much your ministry would benefit from a gift like that? I’m going to go out on a limb and guess your ministries aren’t already fully funded for the next decade. Consider the possibilities if you were to receive such a gift!

4. You want the universities and colleges of your attendees to receive all the charitable gifts from their estate plans.

Colleges and universities work hard to inform their alumni (your people) about the possibilities of leaving a legacy at their alma mater. They educate them of the possibilities, they regularly share examples of gifts received from other alumni and how those gifts will make a lasting impact.

What are you doing about this?

5. When a member dies, you believe the IRS and US government would steward money from their estate more effectively than your church.

We should all probably just let the government handle what your members leave behind anyway. I mean, we can all agree that’s the best plan, right?

6. You are not interested in educating younger families about the importance of having a will.

There are two components to an effective legacy giving strategy, one of which is specifically targeted to younger families in your church. Did you know 65% of Americans do not have a will?

Your young people need to understand what happens to their children if they die without a will in place. While the young couple may not have a will, the state does, and parents won’t like what it holds for their kids.

7. Your attendees’ average age is under 40, so you don’t think the conversation applies to them. 

Related to #6 above, most pastors mistakenly assume that a legacy strategy is all about securing gifts from older people. An equally important part of any legacy strategy includes the education of younger constituents about the importance of having a will. You can also discuss charitable giving in that conversation, but it is not the primary motivation for engaging the younger family.

That being said, there is evidence that it is never too early to engage your people in the legacy giving conversation. Anyone who owns assets, is married, or has children is encouraged to have a will. So this is by no means a conversation for AARP members only! By teaching about legacy giving early and often, you can plant the seeds for your people regardless of age.

8. You don’t want to teach your people about whole-life stewardship and generosity.

Some of us have gotten pretty good at teaching about giving. But there is more to the conversation than just giving out of current income. I know you’ve heard the saying “you can’t take it with you”. That is the epitome of legacy giving. We know our earthly assets stay here after us, but they will go to someone or something.

For a devoted Christ follower, it is appropriate for you to introduce the idea of including the ministry and mission of your church in one’s will or estate plan. Start those conversations and plant those seeds today.

9. You haven’t reviewed your will in the last 20 years, so why would you ask your people to review theirs?

Pastor, have you not reviewed your will recently? You did include the church in your will, didn’t you? Wait, you do have a will, right? With all the life changes we experience, it’s a great idea to review your plan on a regular basis. Besides, you can’t in good faith ask your people to do something you yourself haven’t done.

10. You’ve never considered an estate plan for your personal situation, so why would you challenge your people to have one?

Have you ever explored this topic with a professional (tax attorney or financial planner)? Well, there’s no better time than the present! Speed of the leader = speed of the team. After you’ve done so, encourage your senior leaders to have their own plans in place.

Also, they should have included charitable contributions in their plans. In doing so, they will be able to more effectively engage others in the conversation, as they share their personal experiences with estate planning.

Ok, so I’ve had some fun with this tongue-in-cheek look at why you would NOT want to implement a legacy strategy in your ministry. Stay tuned for more conversations on the basics, as we explore possibilites to help define and effective legacy strategy.

About Rusty Lewis

As a church leader, there’s nothing more frustrating than not having the funding to do what God’s calling you to do. But when you think about trying to address that problem, you feel overwhelmed, you dread the potential pushback from your congregation, and you’re not sure where to turn for help. Over the last 18 years, I’ve helped more than 120 churches close the gap between their current financial reality and what they need to move forward in ministry.

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