Planned Giving Insights and Information

Breaking News - Legacy IRA Act Becomes Law

[Updated December 29, 2022] In the final hours of the 117th Congress, provisions of the Legacy IRA Act included in an omnibus spending bill (the Consolidated Appropriations Act, 2023 or H.R. 2617) passed the House and Senate and were signed into law by President Biden, creating a new charitable gift planning opportunity. Beginning in 2023, donors over age 70 ½ will be able to make a Qualified Charitable Distribution (QCD) in exchange for a charitable gift annuity (CGA) or to fund a charitable remainder annuity trust or charitable remainder unitrust. For practical purposes, it is unlikely donors will use this opportunity to fund a charitable remainder trust. However, a charitable gift annuity could be an appealing and viable option for some donors.

Analysis of the New 2023 ACGA Annuity Rates

On November 23, 2022, the American Council on Gift Annuities announced that it would be increasing its suggested maximum annuity rates, effective January 1, 2023 (the “new rates”). We now know the details of the new rates, which the ACGA made public on December 19, 2022. The new rates replace the rates that became effective July 1, 2022 (the “current rates”). The ACGA’s decision to increase its suggested maximum gift annuity rates was triggered by the sharp rise in interest rates that started in March and has continued since July.

Is the Legacy IRA Act the Next Big Thing?

The “Legacy IRA Act” would allow a Qualified Charitable Distribution (QCD) from an IRA to fund a split interest gift (charitable gift annuity (CGA), charitable remainder unitrust (CRUT), or charitable remainder annuity trust (CRAT)). At the time of this writing, this proposed change has been included in pending legislation that is, alas, stalled as the 117th Congress heads toward adjournment in December 2022. If the Legacy IRA Act provisions are not passed this year, there are plans to reintroduce the legislation when the new Congress convenes in January 2023. What are the chances the Legacy IRA Act will become law? And, more importantly, what should you be telling prospective donors? Before we get to those key questions, let us review the proposed Legacy IRA Act and its journey through this Congress.

New IRS 2010CM Mortality Table Throws a Curveball

We have learned something unexpected about the new 2010CM mortality table. Published in proposed regulations released by the IRS in May, 2010CM can in some situations produce a higher deduction than the 2000CM mortality table we’ve been using since 2009. This is an important realization, because the proposed regulations allow donors to compute their deductions using 2010CM or 2000CM until the IRS publishes final regulations. Naturally, donors will want to use the table that gives them the greatest benefit during this transitional period.