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Contact: amyhereford <at> gmail.com Copyright 2010
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Newsletter
Summer 2010-b
The
retirement trust continues to be discussed by leaders and treasurers of
religious institutes and societies as a
means of holding its retirement assets. First introduced to religious
institutes in the 1970's for holding retirement assets, the trust is
still the tool of choice for protecting assets from liability that may
arise against a religious institute. The charitable retirement trust is
not for every institute however, and its popularity seems to wax and
wane over the years. An increasing issue today is the need to drawn on
the assets of the trust for elderly members, and the proper handling of
that transaction. In addition, changing structures require reevaluation
of the trust structure as well. Established Trusts - Institutes that have established trusts generally continue them. Like any other structure, trusts require continuing administration and should be periodically reviewed to ensure the ongoing validity and usefulness of the trust in protecting assets, particularly if the institute is considering some type of restructuring. New Trusts -
Institutes that do not currently have a trust continue to
explore the question of establishing trusts in their ongoing efforts to
steward the assets of the institute. The value of establishing a trust
depends on many factors, including the size and complexity of the
community and its civil structures, the arrangements for retirement,
and the source of retirement funds. Restructuring Trusts - Institutes in the process of restructuring provinces or congregations are faced with the task of evaluating the various retirement funds and trusts to choose the most appropriate tool for holding and administering the retirement assets of the new combined entity. Common Concerns - Regardless of the posture of an institute, the issues raised when considering the use of a charitable trust for holding the retirement assets of the community are similar: 1. Does the trust continue to provide any protection for retirement assets? 2. What are the factors that make a particular institute a better or worse candidate for use of the retirement trust? 3. Compared to an internal fund, how much additional administration is required for the proper maintenance of a charitable trust? 4. Does receipt of trust assets impact a member's eligibility for Medicaid and other government assistance programs? 5. What steps can an institute take to ensure that it makes maximum use of the added protection afforded by a retirement trust? 6. What concerns are raised when the assets of the trust are paid out for the support of aged and retired members? Issues - The concerns
for a charitable retirement trust have changed
over time. In the early days of the trusts, many institutes were
concerned to maintain control of the assets set aside in trust. Since
the late 90s, the concern has been over vulnerability of the assets in
lawsuits and consolidation of financial statements. As always, careful drafting of the trust should ensure adequate legal protection of the trust assets so that they are available for retirement needs. In addition, administration should ensure that the legal protection is not compromised through sloppy handling of the trust. * * * For more information on this topic, October's webcast will examine the retirement trust of religious institutes, discussing also the interplay between canonical and civil obligations. There is still time to register for September's webcast with an overview of the civil corporation for Religious Institutes and Societies. November's webcast will be on canonical recourse, the process of seeking equitable solutions within the Church.
Time: Tuesdays, 2:00 pm ET, 11:00 am PT *Special Series - The special series on civil structures of religious institutes will examine each of the structures in more details and may be helpful for those who are considering changing or updating their structures. Participants may sign up for the entire series of four webcasts for the discounted price of $230, or they may register for any of the individual programs. Recorded Webcasts: Not available for a webcast? You can register to view it On-Demand or on CD-ROM. An On-Demand webcast is available for those who are unable to attend the webcast live. It is generally available within 48 hrs after the live webcast and may be view at your convenience over a several month period. The program can be downloaded or viewed on the web. (More environmentally friendly than the CD-ROM below) In addition, webcasts are also offered on CD-ROM. This format is especially helpful for those without access to high speed internet. CD-ROMs are shipped a few weeks after the webcast. If I can be of any assistance to your organization, please do not hesitate to contact me. Peace, *A webcast is a seminar delivered over the internet. |
