Take Note: Make Charitable Donations by December 31!

December 6, 2022

As the end of the year approaches, we should all take note of certain deadlines with regard to tax planning. Otherwise, you could end up wishing you had made different decisions when it’s time to file your taxes in the spring. For those of you who plan to utilize charitable donations as a deduction on your income tax returns, here is what you need to know. 


Understand the limits. Fortunately, for both you and the charities you plan to support, the limits on the charitable donation deduction are set quite high. If you donate cash to charity, you can deduct up to 60 percent of your adjusted gross income (AGI)! And if you make non-cash donations, you can claim up to 30 percent of your AGI for those. 


The charitable donations deduction can also be used to reduce capital gains taxes. When you sell assets that you have held for more than one year, capital gains tax will apply to the profit. But you can avoid this tax by donating the non-cash asset directly to charity, while also claiming the deduction for your charitable contribution. 


Donor-advised funds allow you to earn your deduction now, while deciding upon worthy causes later. Maybe you want to earn your tax deduction for charitable contributions by the end of the year, but don’t have time to decide upon a charity. Set up a donor-advised fund, and you can go ahead and make your donation to the fund. This buys you more time to decide upon a worthy cause and disburse the money later. 


Charitable contributions can offset the tax liability of required minimum distributions (RMDs). Once you’re required to begin RMDs from your retirement account, those distributions will be taxed as income. However, you can direct part or all of the withdrawal to a Qualified Charitable Distribution instead. The money won’t be counted as taxable income if you set up distributions this way. 


Remember to save your receipts or card statements. In the event that your return is ever audited, you will need to prove your tax deductions. Save receipts from your charities or make donations by credit card so that you can simply provide your card statements as proof. 


We’re here to help. Call us for more information on year-end financial planning, and we can guide you toward a giving strategy that benefits you and your chosen organizations. 

How to Ensure Your Spouse Is Financially Secure After You’re Gone

May 19, 2025
One of the most important and loving steps you can take in life is making sure your spouse will be financially secure if something happens to you. While it is not always easy to talk about, planning for the future is a meaningful way to provide peace of mind and protect your partner from unexpected financial hardship. Insurance plays a central role in that protection. With the right strategy in place, you can help ensure your spouse maintains their lifestyle, covers essential expenses, and remains financially independent long after you are gone. Life Insurance for Income Replacement Life insurance is often the cornerstone of a spouse protection plan. A term life or permanent life policy can provide a tax-free lump sum to your spouse upon your death. This payout can help cover the mortgage, pay off debts, cover everyday living expenses, or fund future goals such as travel or education for grandchildren. When choosing coverage, consider your spouse’s current and future needs. Will they still have a mortgage or other loans to manage? Do they rely on your income for day-to-day expenses? Will they need extra support for healthcare or long-term care later in life? A thoughtful review of these questions can help determine how much coverage is appropriate. Survivorship Life Insurance for Estate Planning Also known as second-to-die insurance, survivorship life insurance covers both spouses and pays out only after both have passed. This type of policy is often used in estate planning to cover estate taxes, preserve assets for heirs, or support charitable giving. While it does not provide immediate support for a surviving spouse, it can help ensure your combined legacy is preserved. Fixed Annuities for Lifetime Income* Annuities can offer a steady stream of income that continues for as long as you or your spouse lives. Certain annuity products can be structured to provide spousal benefits, meaning that if you pass away first, your spouse will continue receiving income. This is especially helpful in retirement planning and can provide a predictable foundation for monthly expenses. Long-Term Care Insurance for Future Health Needs One of the biggest financial threats to a surviving spouse is the cost of long-term care. If you use a significant portion of your shared assets to cover your own care, your spouse could be left with limited resources. Long-term care insurance helps offset these expenses and protects your financial plan from being derailed by medical or custodial care costs. Final Expense Insurance for Funeral and End-of-Life Costs Even a small life insurance policy designed to cover funeral costs and final expenses can relieve your spouse from financial stress during an already emotional time. These policies are typically easy to qualify for and provide quick access to funds when needed most. Review and Update Beneficiaries Regularly One of the simplest yet most important things you can do is keep your insurance policy beneficiaries up to date. Major life events such as a new marriage, the birth of a child, or the passing of a loved one can all affect your financial picture. Regular reviews ensure that the right people are protected and that your intentions are clear. Plan for the Future Today Taking time to plan ahead with the right insurance solutions can help your spouse feel secure, supported, and cared for no matter what the future holds. You have the power to provide financial stability that lasts beyond your lifetime. If you want to be certain your spouse is financially protected, we are here to help. Contact our office to schedule a consultation. We will help guide you in building a personalized insurance strategy. *Annuities contain limitations including withdrawal charges, fees and a market value adjustment which may affect contract values. Annuities are products of the insurance industry; guarantees are backed by the claims-paying ability of the issuing company. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

Smart Ways to Fund Long-Term Care Without Draining Your Assets

May 14, 2025
Long-term care is one of the most overlooked yet potentially costly aspects of aging. Whether it involves in-home assistance, assisted living, or nursing home care, the expenses can add up quickly. Without proper planning, these costs can eat away at your retirement savings and leave little behind for your spouse or loved ones. The good news is that there are smart ways to fund long-term care without draining your assets. Understand the True Cost of Long-Term Care According to Genworth’s 2023 Cost of Care Survey, the median annual cost of a private room in a nursing home is over one hundred thousand dollars. Even in-home care services can cost upwards of sixty thousand dollars a year, depending on the level of care needed. These numbers highlight the importance of planning ahead before a health crisis forces quick and expensive decisions. Explore Long-Term Care Insurance Long-term care insurance is a traditional option that helps cover the cost of care when you are no longer able to perform basic daily activities. These policies can help protect your retirement savings and give you more flexibility in choosing where and how you receive care. It is best to apply for coverage when you are in your fifties or early sixties since premiums tend to rise with age and health conditions can make you ineligible. Consider Hybrid Insurance Policies If you are concerned about paying premiums for something you may never use, hybrid policies offer an appealing alternative. These policies combine life insurance with long-term care benefits. If you end up needing care, a portion of the death benefit is used to cover those costs. If you never use the long-term care portion, your heirs still receive a life insurance payout. This can be a smart way to protect both your future and your legacy. Use a Health Savings Account (HSA) If you have an HSA, it can be a valuable tool for long-term care planning. Funds in an HSA grow tax free, and withdrawals used for qualified medical expenses are also tax free. While HSAs cannot pay for insurance premiums directly, they can help cover out-of-pocket care costs, including in-home services, adult day care, and even nursing home expenses. Create an Irrevocable Trust For those concerned about preserving assets for their heirs, setting up an irrevocable trust can be a powerful strategy. By transferring assets into this type of trust, you may protect them from being counted when applying for Medicaid. This type of planning must be done well in advance, as Medicaid has a look-back period that can disqualify you if assets are transferred too close to the time of application. Leverage Annuities for Long-Term Care Needs Certain annuities are designed to generate income while also providing enhanced payouts if long-term care becomes necessary. These products can offer a consistent income stream during retirement and a larger benefit if your health declines. They are especially appealing for individuals who want both growth potential and added protection against care costs. Consult with Your Insurance Professional The best approach to funding long-term care depends on your unique situation, including your health, financial goals, family structure, and available resources. Give us a call, and we can help you explore your options and build a personalized strategy to protect your wealth and your well-being. Long-term care planning is not just about money. It is about making sure you maintain your dignity and independence as you age. With the right plan in place, you can meet the challenges of aging without sacrificing everything you have worked so hard to build.
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