Whether done as a purely generous gesture, with no thought of estate planning, or as a deliberate strategy to manage your estate while you are living, use of the Annual Gift Tax Exclusion can maximize ministry opportunities.

An Illustration: Family Care

When the gift tax was created, Congress recognized that many parents make gifts to children for birthdays, Christmas and other special occasions. In order to avoid receiving more than 100 million gift tax returns per year, Congress wisely created an annual exclusion.

Each person is allowed to make tax-free gifts of $13,000 per recipient every year. This amount is large enough to cover nearly all gifts to children, grandchildren, friends and family members.

Using the annual exclusion over a number of years, it is possible to make very large gifts. For example, a couple with 12 grandchildren could give them $312,000 per year. The grandfather could give $13,000 to each of the grandchildren, and so could the grandmother, which equals 24 gifts times $13,000, or $312,000. If the grandparents give these amounts in stock or land and the grandchildren retain the assets, there could be additional growth. Over a period of perhaps 10 years, the potential exists to give the value of more than $3 million to grandchildren, using annual exclusions.

There is an additional exclusion for educational and medical expenses. If a grandparent makes a tuition payment directly to a grandchild’s school, this amount is not included in the $13,000 limit. In addition, the grandparent may make a payment for qualified medical or dental expenses directly to a health care provider. These amounts are also excluded. Children who are paying the medical expenses of their elderly parents may also benefit from this medical expense exclusion.

Ministry Opportunities

This concept of making annual $13,000 gifts, or gifts directly to educational or medical institutions, on behalf of family members or friends can open up rewarding ministry opportunities to support our San Diego Rescue Mission team and graduates. Advanced education, and special medical care support might provide special resources not available through other programs.

Consider the possibility of using your annual exclusion in some of these ways:

• Funding College Annuities to help cover the costs of advanced education for Rescue Mission graduates or their children
• Gifting cash to a medical institution to meet emergency, uninsured medical costs

For further information and assistance, please contact Steve de Graaf in our Gift and Estate Design Services office.

Phone: 1-619-819-1758 (Steve de Graaf) or Email:

or complete our Confidential Reply Form

Write us: San Diego Rescue Mission, P.O. Box 80427, San Diego, CA 92138-0427