At a recent meeting of our local planned giving council, I discussed some year end surprises in new legislation commonly known as “SECURE 2.0”, a part of the Consolidated Appropriations Act of 2023 (“CAA”). While many CAA provisions affect retirement plans, a few affect charitable giving. This legislation was signed into law by President Biden on December 29, 2022.
The provisions affecting charitable giving are generally effective January 1, 2023, and a brief summary was given at the meeting as follows:
These changes are not perfect but a good start. Hopefully, Congress will act to expand the IRA charitable rollover even further in the future.
As with almost all tax law, there are a few quirks and potential pitfalls, including:
The $50,000 one-time limit in Secure 2.0 is quite low for CRTs, and may be below the required minimum in the planned giving policies of many charities and below the acceptable minimums of corporate trustees. An unanswered question is whether a donor and spouse can each fund the same CRT with a one-time $50,000 QCD from each of them. A $100,000 CRT is much more attractive to a corporate trustee and is usually at or above the minimums in many planned giving policies.
As always, the devil is in the details. While the expansions to the IRA charitable rollover are welcome, they come with complications.
Please do not hesitate to contact any attorney at Owen Law Group if you have any questions on the above changes or any other matter related to charitable organizations.