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FEBRUARY 2022
Information on Tax and Estate Planning from the Masonic Charities of the Grand Lodge of Pennsylvania
No matter what the reason, Americans, and especially Masons, have stepped up through the years to support numerous charitable institutions that seek to better the lives of the less fortunate among us or to support causes to preserve our heritage and well-being. It is important that this tradition be carried on from generation to generation, for it is not the government through taxation that should be the sole source for making our lives better, but the desire of our society to help each other directly through charitable giving which makes our nation and fraternity so special.
To the extent we can help, the goal of the Office of Mission Advancement and Development is to act as a facilitator in connecting Masons and friends of the fraternity with their charitable dreams.
Why SHOULD I GIVE? After 20 years as an attorney doing charitable planning for our donors, I am always amazed and humbled by the people I meet across the country who want to help our mission or any other charitable endeavor. The joy of working with such individuals is what inspires me to travel the country and come to work each day. So, I ponder why some people give and some don’t. There are obvious reasons like the inability to give for financial reasons. But even then, I know many a “widow’s mite” who give to charity no matter how little he or she possesses. I am convinced that much giving comes from the habit or moral obligation instilled upon us from a young age. We want to help those less fortunate than us or help fulfill a cause that is important to us. Others give for social recognition or to influence an outcome in their favor.
I have always looked at my role as an attorney and gift planner not to “solicit” gifts but to assist our donors in achieving their charitable goals in the most tax efficient manner to benefit themselves, their loved ones and their favorite charitable causes. When opportunities arise for supporting a specific project or charitable mission, our goal is to inform you of such opportunities without any sales pressure. I am always reminded people give to relationships, and it is through relationships we accomplish our personal goals.
So, for 2022, consider what you might do to support our Masonic fraternity.
For a comprehensive look at what the fraternity provides to its members, Masonic families and communities, visit pagrandlodge.org/masonic-charities/. On this page, you will find the Resource Guide & Contacts, Outreach Application and the Your Masonic Charities – Do Good Unto All brochure. If you would prefer a hard copy of these materials, call our office at 1-800-599-6454, and we will mail them to you. This webpage also contains links to the Masonic Children’s Home, Masonic Library & Museum of PA, Masonic Villages, Masonic Blood+Organ Donor Program and the PA Masonic Youth Foundation, all worthy of your consideration. Our office would welcome the opportunity to work with you to develop a plan to meet your charitable goals. Consider it before it’s too late, because you can’t take it with you.
Masonic Village at Elizabethtown
Should I Apply to Masonic Villages? (For some, you may regret it if you don’t!) I was visiting with Brother Frank at his condo in Venice, FL, when he posed a question that I get at almost every reception I do in Florida. He quipped, “Al, I love Florida with its warm weather and beautiful beaches. You always talk about the Masonic Villages like it’s some safe haven for me in my later years. Why should I think about applying to go there?” I replied, “Frank, Florida is nice despite its howling hurricanes, venomous snakes, giant roaches and gaping gators, but we all need to plan for the unexpected. Yes, our five campuses in Pennsylvania are in colder climates and it’s a little chilly in the winter, but for many of us, it’s about the quality of life and care we receive in our later years that are important. You really need to protect your options.” Frank seemed perplexed. “What do mean by options, Al?” he retorted. I said, “Frank, unless you are really well off and can easily afford home health care at around $250,000 or more a year, or you can get into one of those gated communities with health care facilities that cost a fortune, then you better add Masonic Villages as an option to your retirement plan. The longer you wait to get your name on the waiting list at Masonic Villages, the lesser your chances are of getting in if you need help. It is rare they take walk-ins for retirement living or long-term care, even if you are a PA Mason.”
Frank responded, “But what if they call me with an available place, and I don’t want to go yet?” I replied, “You can set the time you want to go. You fill out the application indicating what you are looking for at a particular campus and send it with a deposit to reserve your spot. You can tell them when you are looking to move, and if you change your mind, you can get your money refunded. By going through the financial assessment and application process now, you have a much better chance of getting a place at Masonic Villages than waiting until the last minute.” Frank asked, “Is it true you can get free care if you are a PA Mason?” I responded, “Yes, but if you have the assets, you will have to spend down the money you have first before getting subsidized care. If you are destitute when you apply, the process is different, but if a space is available, you can get a retirement living studio at Elizabethtown, and personal care or skilled care is available at all communities except Dallas. You will not be turned away for financial reasons. This includes your wife if she is widowed and any of your immediate family. We spend over $35 million a year on free care and services as our primary mission of assuring PA Masons and their families over age 60 are taken care of with dignity and respect.” Frank leaned over to me and exclaimed, “Where do I sign up?!” I directed Frank to the Masonic Villages website (MasonicVillages.org) so he could decide which campus he was most interested in and inquire about submitting an application. A couple weeks later, Frank called me and said, “Thanks for giving me and my family peace of mind knowing I will be taken care of if I decide to leave Florida. I am not ready yet … but I am glad it is now an option.”
Neither Masonic Charities of the Grand Lodge of Pennsylvania, nor Alvin H. Blitz, Esq., provide legal, financial or tax advice. None of the information in The Blitz should be deemed legal, financial or tax advice or acted upon by any person without prior consultation with appropriate professional advisors.
Do I Need a Broker
or Investment Advisor? (Well, it depends!) I love Scottsdale, AZ. Great food and sun (except in the summer). Lots of super cars, and you can’t beat the desert vibe in the winter. So, I went to lunch with one of our biggest donors the other day in Old Town Scottsdale. Brother Jack moved here from Tionesta, PA, 10 years ago to escape the winter snow of northwest PA. He likes his condo overlooking his favorite golf course and is living the good life, but the stock market has him concerned. At age 65, he has always played the market on his own. His wife just goes along for the ride without blinking an eye, since he has done well enough that she can buy whatever she wants at Neiman Marcus. Jack, however, is worried the party is about to end, or worse yet, he may have a fatal heart attack and die like his dad without preparing his wife to manage the assets she is left with. I personally reflected upon this same situation when I turned 60 and understood Jack’s predicament. Jack inquired, “Brother Al, do you have any sage advice on what I should do?” I told Jack how I managed a similar situation. First, my wife can only buy whatever she wants at Macy’s with our assets, but that doesn’t change the outcome. I used a discount broker all my life and did fine investing on my own. My broker, Jim, steered me to some great stock picks, and I must say I picked some good ones, like Apple, on my own (of course, I forgot about all the losers I picked). My dad died of a heart attack at age 38, so I was getting nervous about my future. My wife is smart, but couldn’t care less about the stock market. This is when it dawned on me I need to make sure she is taken care of if I pass first. Before we proceed further with my story, a brief lesson on the difference between a broker and investment advisor is necessary. INVESTMENT ADVISOR VS. BROKER Investment Advisors are registered with the Securities and Exchange Commission (SEC) and held to a fiduciary standard. They provide financial advice and are legally obligated to act solely in the best interest of their clients. Certified Financial Planners (CFPs) are also required to act as a fiduciary. They generally are paid on a fee basis, which could be a percent of the assets they manage for you. If you have $1 million in assets and the advisor charges a fee of 1%, then he or she gets $10,000 in advisory fees.
Brokers are registered with the Financial Industry Regulatory Authority (FINRA) and are only held to a “suitability” rule. They receive commissions based on the products they sell, not the ongoing advice they provide, and can recommend a transaction if there is a “reasonable basis to believe” it's suitable for the customer. The only cost for the broker is the cost of each trade, so depending on the brokerage firm and the amount of trading you do, your fees could be rather small, like $100 to $2,000 on a $1 million investment. WHAT IS BEST FOR ME? For hard core investors like Jack and me, the brokerage arrangement always seemed to work out best. Why pay $10,000 for advice you never listen to when you could save $8,000 to invest in more stock? However, if you don’t know what you are doing or really don’t have the time or even care to learn, then paying the investment fee for an investment advisor might be a good idea. The investment advisor also has a higher fiduciary duty to take care of his client than a broker, so that may be an additional incentive to pay the fee. In my case, it was time to bite the bullet and get an investment advisor to handle our assets. I really don’t like paying the advisor fee, but I liken it to paying life insurance premiums so my wife has peace of mind knowing her assets are managed for her if I pass first. A word of caution here. If you have worked with a great broker for years and are confident in his or her ability to help you invest, I wouldn’t suggest just moving to an investment advisor right away. Many brokers are good at helping their clients succeed without the cost of an investment advisor. You should, however, have an alternative plan in place should your broker retire or leave the firm you have your assets with. If you do not have a real relationship with a discount broker, then the decision to move your assets may be easier. There is no right answer here, but being prepared for the unknown is helpful. SO, WHAT SHOULD JACK DO? After investigating the qualifications and investment fee rates for various advisors, Jack decided to take the bulk of his assets from his discount brokerage account and move them to an investment advisor. However, he kept about 10% of his assets with the brokerage firm as play money to trade on. Jack’s wife was happy to hear that she now has someone to work with to invest their assets should he pass away first. As I always say, “a happy wife is a happy life.”
If you would like further information on Investment Advisors vs. Brokers and the fees they charge, please email me or call our office at 1-800-599-6454 for more information.
1-800-599-6454 | MasonicCharitiesPa.org
Masonic Charities One Masonic Drive Elizabethtown, PA 17022
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Join Me for Lunch Please see the dates below where I will be holding upcoming luncheons. To RSVP, call 1-800-599-6454 or email ABlitz@masonicvillages.org.
Santa Monica, CA March 8 – 10
Savannah, GA April 5 – 7
Myrtle Beach, SC March 21 – 23 Brother Alvin H. Blitz, Esq., Carlisle Lodge No. 260, serves the Masonic Charities of the R.W. Grand Lodge of Pennsylvania, which consists of the Masonic Villages, the Masonic Children's Home, the Pennsylvania Masonic Youth Foundation, The Masonic Library and Museum of Pennsylvania and the Grand Lodge of Pennsylvania Charity Foundation.
FEBRUARY 2022