COVID-19 Protocols

April 1, 2021

Dear TBF Friends & Clients,

The Tennessee Baptist Mission Board (TBMB) Church Support Center (CSC) in Franklin, Tennessee is open with normal business hours, which includes the Tennessee Baptist Foundation.

The TBMB has extended the following COVID protocols until May 31, 2021:

• In-person meetings in the Church Support Center are limited to 10 people or fewer
• In-person meetings will practice proper social distancing and safety protocols
• While in the building all employees and guests are required to wear a face mask while moving throughout the building. Masks may be removed at employee workspaces or when socially distanced in meeting rooms.
• TBMB and TBF staff may travel but are encouraged to conduct as much of their work online as possible.
• TBMB and TBF staff are required to exercise proper safety precautions when meeting with Baptist organizations off-site.

Our staff will be doing part of our work remotely but will have someone in the office each day Monday through Friday.

We have found Zoom to be a great tool in communicating and we are even able to conduct seminars for your church via Zoom. The Foundation staff are prepared to connect with you virtually using Zoom or other videoconferencing technology, or by phone. 

You can make a virtual appointment or request an in-person meeting with one of our staff members by calling 615.371.2029 or by sending us a message on our contact page.

I encourage you to hold close these words from Jesus found in John 10:27:

“Peace I leave with you; my peace I give to you. I do not give to you as the world gives. Do not let your hearts be troubled and do not be afraid.“

Serving Christ with you,

Rev. Bill Gruenewald, President-Treasurer

Zoom Meetings Available for Church Groups and Individuals

We want to make our services as accessible as possible to you during this unusual time. Click here to get in touch with us about scheduling a Zoom meeting.

The charitable remainder trust (CRT) is a multipurpose tool

by Christopher L. Kelly, Esq.

A charitable remainder trust (CRT) takes a bit more complex planning than other trusts, but for the right donor, it can be greatly beneficial. It has the unique ability to support a charity (like a Baptist cause), guarantee income for him/herself or family for a season, and earn a tax deduction all at once. 

A CRT is an irrevocable trust created by a donor whereby the donor or other individuals (usually a spouse or other family members) receive income for a certain period of time from the trust, and when that time has passed, the trust terminates and the remaining funds in the trust are paid to a charity. 

In addition to having a desire to help a charitable cause, donors more ideally suited to implementing this strategy usually have an appreciated asset or retirement assets that could be used to make the gift to the charity. With both of these types of assets, if the donor were to sell them or access the assets themselves, he/she could incur substantial tax obligations. 

A CRT helps address these taxation issues. First, by using the types of assets listed above, the donor can shift the taxable consequences for selling the appreciated asset or accessing retirement funds to the CRT (which itself pays no taxes). For example, if a donor owns an asset with a low-cost basis (such as stocks, bonds, mutual funds, real estate, etc.), if he or she sold it outright, he or she would realize a capital gain in the year of the sale. However, the same low-basis asset can be gifted to a CRT. Even if the CRT sells the asset as soon as it is received, no capital gains are realized by the trust immediately, but are instead spread among a number of years to those persons receiving income from the CRT. Thus, when the donor begins receiving income from the trust after the gift, he or she has effectively converted a taxable asset to an income stream for him/herself without having to pay the full capital gains tax bill in one year. 

Additionally, using retirement accounts (such as IRAs, 401(k)s, 403(b)s, etc.) to fund a CRT after a donor’s death can be a tax-efficient way of making the initial gift into the CRT. While an individual who receives money directly from a retirement account has to include the retirement distribution in his or her ordinary income in the year, a CRT does not realize the same tax obligation. Thus, a retirement account can be fully paid out to a CRT in a lump sum without recognizing this usually large income tax bill. The beneficiaries then begin receiving income from the trust, only paying income tax on the distributions they receive in a particular tax year (see the paragraph below about how the income tax obligation is calculated). This strategy can be particularly effective when a donor wishes to provide income to family members after his or her death while still ensuring that the charity receives a benefit in the future from his or her retirement assets. 

Secondly, while it is true that the income paid from a CRT to a recipient is taxable, the exact taxation is calculated based on a tiered system. Without going into full detail on the system, the bottom line is that using the calculation usually softens the income tax impact on the individual receiving income because each dollar received is taxed according to the type of income to which it is attributed (i.e. capital gains, ordinary income, tax-free income, etc.)  Some income tax classes are taxed more favorably than others. The full impact of taxation on the beneficiary will depend on the assets used to fund the CRT, how assets within the trust are sold, and the type of income the CRT earns each year. For most, however, the tiered system gives a more favorable result when it comes to individual taxation. 

Finally, in the year of the gift, the donor gets the added benefit of a possible tax deduction. This can be especially useful if the donor has been blessed with higher income in a particular year. 

As to the structure of a CRT, there are two main types of CRTs: the Charitable Remainder Annuity Trust (CRAT) and the Charitable Remainder Unitrust (CRUT). The primary difference between these two CRTs is how the income distributed to the persons is calculated. In a CRAT, the beneficiaries receive a fixed amount each year, while with a CRUT, the beneficiaries receive a fixed percentage of the assets held in the trust. The best method for payout depends on the unique situation that the donor is trying to address. 

A CRT is a sophisticated strategy, and as you might imagine, there are particular rules that must be closely followed from beginning to end. However, for the right donor, the CRT may be a perfect solution, accomplishing many long-term benefits at the same time.

Ready to get started?

You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

3 Ways to Build A Culture of Generosity in Your Church

by Rev. Bill Gruenewald

In their book “Contagious Generosity,” Chris Willard and Jim Sheppard write, “Generosity is at its core is a lifestyle, a lifestyle in which we share all that we have, are, and ever will become as a demonstration of God’s love and a response to God’s grace.” 

We serve a gracious and generous God. It should be only natural that every Christian would have an attitude of generosity in all areas of life. Unfortunately, though, this topic is not often talked about in our churches. So how can church leaders help bring about a culture of generosity in their church? 

We believe there are three primary ways to help a congregation cultivate generosity in the church:

1. TEACH IT

As Baptists, teaching is important in the life of our church, and it’s the main focus of Sunday school or Bible study. It is a part of our DNA; it helps us understand God’s Word and apply it to our daily lives. With more than 2000 verses dealing with money and finances, we need to teach what God’s Word says, so we can make life changes in how we handle money. This will allow us to become better stewards and give us the freedom to be more generous with the material blessings God has given each one of us.

2. TELL IT

They say a picture is worth a thousand words. I believe a story is better than 100 sermons! Stories come from our life experience, and when we share them, we encourage others in a more memorable, impactful way. We need to have members share their stories to show the impact of how generosity is making a Kingdom impact as well as how they have been blessed to be the instrument of God’s love and grace. Sharing stories gives other members an opportunity to relate and be inspired toward growth in their own lives.

3. PRAISE IT

As a church, we do not say “thank you” as often as we should. In fact, many secular nonprofits do a better job at donor relations than the church. We need to cultivate gratitude in addition to generosity. Sending notes, emails, and even—when warranted—a public expression of gratitude will foster more generosity in your congregation. In an age where value is often defined by “what’s in it for me?”, gratitude is one of the greatest spiritual characteristics leadership can model for our members.

Willard and Sheppard go on to write:

“Generosity, when motivated by genuine love for God, is contagious, drawing others to wonder why people would give of themselves while expecting nothing in return. In fact, a life and a church community that is characterized by generosity may be the most compelling, effective evangelism strategy we have as followers of Christ.”

That is the type of lifestyle that needs to be encouraged within all our Tennessee Baptist congregations. The TBF would like to work with you to build this type of generosity in your church through our Legacy Ministry program. Give us a call today at 615-371-2029. We are here to help.

Ready to get started?

You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

What Legal Documents Does an 18-Year-Old Need?

by Christopher L. Kelly, Esq.

Many homes across America now have new adults in their midst. People who were high school seniors just a year ago, but are now—according to the law—fully-grown adults. (Notwithstanding the fact they didn’t walk a graduation line!) While some families are planning to send their students off to college in the fall and others are sending these new adults into the workforce, few parents think about their new legal needs now that they’ve had their 18th birthday.  Buying dorm furniture, picking out meal plans and buying new work clothes are important, but it’s also important to think about what legal documents your new eighteen (18) year-old adult may need. You could be in for a terrible realization when something has happened to your child and you find out you are no longer able to make decisions on his or her behalf.  It may be hard to admit it, but you have an adult in the house—and that adult needs adult legal documents.

What are the documents the new adult needs? Here are four essentials.

1. A Last Will and Testament. While a new adult may not own very much at this point in his or her life, it is still prudent to consider executing a fairly basic Last Will and Testament. This will appoint a person or persons as Executor who can handle any final matters in the event of an untimely death. No one knows exactly how their estate may look upon death, so having someone appointed in a Will to deal with any final legal matters could make it much easier for those left behind.

2. A Durable Power of Attorney for Healthcare (DPOAHC). Up to this point, a parent has generally been able to make medical decisions on behalf of their children without any issues. Since the child is now eighteen years of age, the parent is legally no longer able to do so. With a DPOAHC, the young adult appoints someone who can make healthcare decisions for them when they are unable to do so. It is important to ensure that this document contains the necessary HIPAA authorizations so health privacy issues do not arise. 

For example, Johnny is away at college. He’s involved in an accident that requires hospitalization, so he is taken to College Town General Hospital where he is rendered temporarily incompetent due to the medications given to him.  Johnny’s roommate calls his parents to let them know. After they arrive at the hospital, the doctors pose some critical questions about Johnny’s treatment, but there is no one authorized legally to make decisions. In this case, the decisions are left completely up to the medical staff to make in the moment. If it appears that the period of incompetency will extend for some time, his parents do have the option to pursue a conservatorship. However, this can be time intensive when quick decisions are vital. A properly-executed DPOAHC that appoints one or both of the parents as Johnny’s agent takes care of this issue.

3. A Durable Power of Attorney For Financial Matters (DPOAFM). While a young adult’s business relationships may be fairly limited or so intertwined with their parents that there are no issues with gaining access to your young adult’s business records, it is still prudent to have a DPOAFM. Similar to the DPOAHC, in this document a child can appoint an agent to make financial decisions on his or her behalf. This instrument may be useful in dealing with banking, insurance or other business matters when your child may need some assistance. Most DPOAFM are written so that the person named as the Agent may take action whether the child is deemed incompetent or not. This way, the parents could still deal with issues at the local bank even if their child is attending school or working hours away.

Also, since the typical young adult spends so much time online or in the social media realm, you’ll want to ensure the DPOAFM contains the correct language to allow the Agent access to these accounts (i.e. bank accounts, social media accounts, payment apps, etc.).

4. Educational Records Release. The Family Educational Rights and Privacy Act (FERPA) requires that students who are eighteen or older must provide written consent before their educational records are provided to a parent or guardian.  Most schools have their own version of this form, so check with your student’s school about getting a copy of it. Having access to this information will keep the parent or guardian informed about key deadlines (i.e. financial aid, scholarships, dorm deposit deadlines, etc.) as well as the student’s academic information.

Even though that new 18-year-old in the house may still seem like the same kid as last year, it is important to be aware of the changes brought about the moment he or she blew out the candles on his/ her last birthday cake. These four basic documents will cover most of the legal issues that a new adult may encounter, keeping parents informed and empowered to help if the need should arise.

NOTE:

Out-of-State Issues 

If a child will be working or attending school out of state, it is important to ensure that any legal documents the child executes will be recognized as valid in the same state as the school or workplace is located.

Military

If you have a child entering the military, the respective branches of the military provide basic legal services to its members. Encourage your child to check with their command staff about meeting with a military attorney.

Ready to get started?

You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

How an estate plan brings peace in a pandemic

by Christopher L. Kelly, Esq.

People often wait until major life events before they prioritize estate planning—perhaps a doctor gives an unexpected diagnosis or a difficult family situation emerges. The shared health crisis of COVID-19 is unfortunately giving us vivid examples of how quickly our health can deteriorate and how fragile life really is. As a result, many people are wondering what would happen if they were diagnosed with the disease.

A good estate plan not only lays out what happens to your possessions after you die but also includes provisions for your own healthcare in case you are ever unable to make health-related decisions for yourself.  

You can effectively plan for such a time through two documents: the Durable Power of Attorney for Healthcare (DPOAHC) and an Advance Directive (AD). With a DPOAHC, you appoint someone, referred to as an Agent, who can make healthcare decisions for you if you should become incompetent and unable to do so. Note that incompetence may be temporary, such as when under the influence of a prescription drug, or it can be permanent, as in the cases of dementia or Alzheimer’s. During your time of incompetency, your Agent would be able to confer with your doctors, review your medical history, and make healthcare decisions on your behalf—even decisions of life and death. 

Through an Advance Directive (AD), you are documenting the medical procedures that you do or do not want, should you be unable to express those wishes. For example, you can document your decision to refuse life support if you have a terminal illness, or specify that you want artificial hydration and nutrition if you are in a coma. The AD allows you to give guidance to the person or persons making these decisions as to how you would make them if you were able to do so.

If you are a Tennessee resident, you can utilize the Tennessee Advance Directive for Health Care form (download it here) to give these directions and to appoint your Agent to make healthcare decisions for you. 

To legally execute the document, it must be signed in the presence of a notary or two witnesses, but not both. (I recommend utilizing a notary, as I believe it adds formality to the document.)

If you haven’t done any of the above-mentioned estate planning, it’s never too early. Irrespective of the current crisis, the reality is that most of us will find ourselves at some point unable to make our own healthcare decisions, so making preparations for it will bring tremendous peace and certainty to you and those having to make decisions on your behalf. If you have any questions, please reach out to us at the telephone number below. We are more than happy to help. 

Ready to get started?

You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.