Every year many people routinely "take stock" of their financial affairs. This year, due to economic conditions and recent tax law changes, it may be more important than ever that you take the time to review your investments, especially if you are considering charitable gifts.

Unprecedented market values

There has been remarkable growth in the value of stocks and other investments since the early 1980s. As a result, you may now own investments that have dramatically increased in value. If you find yourself in this situation, there are three possibilities for the future:

1. The value of your investments may continue to grow.
   
2. The value of your investments may stay the same.
   
3. Your investments may decline in value.
   

While no one knows for sure what the future might hold, each possibility suggests strategies for those who are considering making substantial charitable gifts. Read on to see how recent tax law changes combined with market conditions may have an impact on the way you plan now and in the future.

Long-standing tax benefits continued

American taxpayers have long enjoyed the opportunity to make charitable gifts of securities and other investments that have increased in value while bypassing capital gains taxes that would be due on a sale. You are, in effect, allowed to use "paper profits" to help reduce federal and, perhaps, state income taxes. This is possible because our nation's tax laws provide that one can give an appreciated asset and take an immediate income tax deduction for the cuffent fair market value of the asset no matter what was originally paid for it!

To take a deduction for gifts of securities and other assets at their current value, you must have owned them for at least one year and a day. Such gifts are deductible up to 30% of adjusted gross income (AGI) in the year of the gift. Any unused deduction amounts may be used in as many as five subsequent tax years.

Americans are well-known for volunteering their time and other resources for the benefit of causes in which they believe. As a result, all our lives are enriched.

Many people also choose to include their charitable interests in their long-range financial planning. Making an ultimate charitable gift can go hand in hand with preserving economic security for one's self and loved ones, thanks to many available methods of planning.

The will is one of the most popular vehicles for making long-range gifts. For each multi-million-dollar charitable bequest you've read about, countless smaller ones are arranged by people of all means, in all walks of life. Indeed, the economic stability of nonprofit causes of all types has been built largely upon charitable bequests.

Ways to make bequests

The best way for you to make a charitable bequest through your will depends on a number of factors including your assets, family considerations, and number of charitable interests. A few of the most commonly used methods are introduced here.

Giving a specffic amount

Stating a dollar amount to be given in your will offers certainty as to the amount that will ultimately be put to charitable use. If you plan to update your will regularly and you are certain that funds will be adequate to satisfy charitable gifts along with other legacies, then giving a specific amount may be a good option to consider.

Giving a specific property

When you know that a charitable recipient needs a particular item or asset to further its long-range goals, you may want to bequeath a specific piece of property. Be sure to check with the intended recipient to make certain the asset you wish to leave can be put to its best use. Keep in mind that if you sell or otherwise dispose of the asset while you live, you may unintentionally "disinherit" your charitable interests. Therefore, it is important to make contingent provisions in the event the property you have bequeathed is no longer among your assets.

Giving a percentage

If you would like to establish a definite relationship between your charitable and non-charitable legacies, consider the idea of giving a percentage of the assets passing under your will to charity. This way, your charitable dispositions will automatically adjust with fluctuations in the total amount passing under your will.

All or part of "what's left"

Safeguarding the interests of your family and other loved ones should always come first in your estate plans. If you are not comfortable bequeathing a specific amount or percentage of your assets to charity, you might wish to provide for a gift from the "residue," or "what's left" after specifically providing for your loved ones.

In this manner you can assure that others receive what you would like them to have before any assets are distributed for charitable use. You may provide that all, a specific amount, or a percentage of the remainder of your estate shall pass to charitable interests.

When considering ways to make charitable gifts more effectively, many have discovered that gifts of real estate can have special benefits for both the donor and the recipient. Whether property has increased or decreased in value, real estate can be a practical and beneficial gift. Below are some ways you can use to make gifts of real estate complement your overall financial plans and perhaps enhance your security now and in future years.

If you are reviewing your plans in light of changes in federal tax laws or current economic conditions, the real estate you own can offer a number of opportunities. More Information on making gifts of real estate is available upon request. We will be pleased to work with you and your advisors as you explore the benefits that may be available through an advantageous gift of real estate.

• Outright gifts of real estate
  If you own a home or other property you no longer wish to occupy or manage and you would like to make a charitable gift. you may find that a gift of real property can be a very efficient way to use your property to meet both goals.
  
  
• When property has grown in value
  If you sell real estate you have owned for a number of years, it is likely you will be faced with a sizable capital gains tax, especially if the property is not your residence.

  Through an outright gift of such a property, a double tax savings is possible. First, in most cases you will receive a charitable income tax deduction for the full value of the property a savings of as much as 40% or more of the property's value. In addition, you will not be liable for capital gains tax on the transfer since the property was given rather than sold.

  If you give property that has not been producing an income (and which may be incurring annual expenses), your gift does not adversely affect your current income.