Open access to services was important to the Children's Organ Transplant Association
in 1986, and it is still important today. Other than legal residence,
age and status as a transplant patient, COTA has no other qualifying criteria.
Family Spotlight
A COTA Teen is Celebrating His Second Chance at Life and National Minority Donor Awareness Efforts
Daniel Yara is a survivor. Throughout his long transplant journey Daniel kept a smile on his face -- even on bad days. Early in life, Daniel was diagnosed with Dyskeratosis Congenital (DC), which is a rare genetic disease that affects literally only one in a million people. Daniel is the youngest of four children and he is the only family member affected by this horrible disease. Daniel’s first major battle against DC occurred in March 2000 when he was diagnosed with Aplastic Anemia, which required that he receive a bone marrow transplant. Fortunately his brother was a match and was the donor.
Then, in January 2007, Daniel developed pneumonia and never fully recovered. Nine months later, his parents received more devastating news -- a diagnosis of Pulmonary Fibrosis and recommendation that a double lung transplant be performed. Daniel’s health deteriorated quickly. He had difficulty breathing and required supplemental oxygen around the clock. No longer able to walk on his own, he had to be pushed in a wheel chair most of the time. The transplant team at St. Louis Children’s Hospital accepted Daniel as a transplant patient and he was listed for a lung transplant in December 2008.
During the days spent at in St. Louis, hundreds of miles from their Virginia home, the Yara family learned about the Children’s Organ Transplant Association (COTA). “We never really thought about how we were going to pay for everything and once we had to move to St. Louis for an extended period, we did not know where to turn to for help. Our transplant center social worker talked to us about possible choices for fundraising assistance and we were given several organizations’ brochures. Of all the organizations, we were touched by COTA’s message of hope … what COTA does … and what COTA stands for.”
According to Michael, “COTA gave us hope regarding our financial situation. Once we started on Daniel’s transplant journey we discovered there were so many expenses we never considered like relocating to the transplant center, loss of income and all the things insurance does not cover. COTA assured us they could help, and they did.”
While sitting in their St. Louis transplant apartment, the call they were waiting and praying for came on February 11, 2009. During a seven-hour surgery, Daniel received new lungs … and a second chance at life. A mere eight days later, Daniel was doing so well that he was discharged from the hospital to the family’s transplant housing.
“Daniel’s lung transplant was a medical miracle. But to see people coming together to help our family during a time of great need was a people miracle. It has restored my faith in mankind. People we didn’t even know made donations. So many people volunteered to plan events. Our family is very blessed, and very grateful,” said Michael.
Today, Daniel continues to smile and to amaze his doctors. At his first lung transplant anniversary celebration it was very apparent that Daniel is able to fully live life once again. Daniel’s COTA website contained the following message from Daniel’s family in honor of his double lung transplant anniversary:
It has been one year since Daniel’s double lung transplant and the only way we know how to describe it is MIRACULOUS. We are feeling extremely blessed as we celebrate his anniversary and we are extremely grateful to the donor family for their gift of life. When we reflect back and remember all those scary times, moments of uncertainty watching Daniel struggle to breathe with his old lungs, he has come a long way and it truly amazing. Daniel, you never cease to amaze us with your strength and the joy you bring us.
Please visit www.cota.org and select “Find a COTA Family” to locate a transplant family in your area needing financial and/or volunteer assistance.
Your gifts to children will enable two types of education. First, your children will have the ability to learn to manage and hopefully invest the gifts to start building their estate. In addition, you will be able to understand better how a child will manage or use the gift property.
Finally, if you have a larger estate, the use of annual gift exclusions can be a very good strategy to save potential future estate taxes.
There are seven different ways that gifts can be made to children:
1. Cash Gifts – You can simply write a check to children. Some parents give an amount up to the annual gift exclusion ($13,000 per child, per parent in 2011 and larger amounts in future years). This is a very easy and convenient way to make a gift. However, there are some concerns about cash gifts that you should understand. When gifts to children are in cash, they are quite frequently spent rather than being invested. If the regular gifts are made over a period of years, it may encourage your children to live at a higher than normal lifestyle. In many cases, the child will benefit more from a gift of a property investment, rather than a gift of cash.
2. Stock Gifts – While it is possible for you to hold stock certificates, the overwhelming majority of stock is now held in a ‘street account’ by a brokerage firm. The easiest method for transfer of stock is for the child to create an account with the same firm. The brokerage firm has the documentation necessary to make a transfer from your account to your child's account.
With a property gift, you will need to know the gift value. Because public stock is valued at the mean between the high and low prices on the date of the transfer, the value is quite easy to determine. Most parents will make stock gifts to children that are below the annual exclusion amount. Each parent will have one annual exclusion for each child, so the total given each year for a couple may be double the exclusion. In addition, larger gifts can be made by filing IRS Form 709 Gift Tax Return and using part of your lifetime
gift exemption.
If stock or other appreciated property is transferred to children by gift, they take the same cost basis as the parents. Although the stock may be appreciated, there is no capital gains tax payable when the stock is transferred. However, the child has the same basis as the parent. If the stock is sold, the child will pay capital gains tax on the increase
in value.
The dividends or income from the stock will be distributed to the child. If he or she is under age 19 or a student under age 24, then in most cases the income will be taxed
to the child at the parent's tax rate. You may have heard this concept called the
"kiddie" tax.
3. Mutual Funds – Many parents own mutual funds that are managed by a financial services firm. These may be a very good candidate for a gift to children. You can create a new mutual fund account and then use the appropriate form from the financial services company to make a gift to the child. If the mutual fund is appreciated, then the potential capital gain and income tax rules are similar to those described for the gifts of stock.
4. Gifts of Land or Home – A gift of real property is accomplished through a deed. Depending upon your state rules, a warranty or grant deed is normally used, but in some cases a quitclaim deed may be appropriate. You will identify the property being transferred on the deed. After you sign the gift deed, it will be notarized and recorded with the county registrar of deeds. This will produce clear evidence that the property has been given to your children.
In order to qualify for the gift exclusion limit, you may choose to transfer partial interests in property. This is called an "undivided interest" in the property. For example, if a property is worth $100,000 a parent might deed 10% of that property each year for 10 years to a child. The gifts will be less than the gift exclusion and after 10 years the child owns the property. If the real property is substantial in value and gifts exceed the annual exclusion, then you will need an appraisal so that the property transferred can be correctly valued on IRS Form 709, Federal Gift Tax Return.
5. Uniform Transfers to Minors Act (UTMA) – Under the UTMA, you may transfer property or assets to a custodian for the benefit of a child who is a minor. The custodian serves as the manager of the asset and can invest and spend funds as he or she considers advisable for the use and benefit of the minor. The custodian must maintain tax records and the income is taxed to the child.
When the child reaches legal age (18 in some states, although age 21 is required or permissible in most states), the child then has ownership of the assets.
The UTMA is convenient and relatively easy to manage. If assets are likely to be used for the child's education by age 21, the UTMA can be a good planning strategy. However, if there are fairly substantial assets you may be reluctant to permit a 21-year-old child to have access to large principal amounts.
6. Trust for Children – A child's trust can be quite flexible. Many parents have created trusts for the benefit of one child or even a "family pot" trust for multiple children. The trustee is frequently given permission to use the trust income for the education, living expenses and health needs of the child.
Trustees frequently have broad discretion over trust investments and the use of the funds. The goal of the parents is to provide for the needs of the child yet protect the funds until the child has reached the age of financial responsibility. As a parent, you have the ability to decide what the general guidelines on distributions will be for your trustee and at what age your children will receive their principal from the trust.
7. Tax-Free Sale Trust for Children – An attractive option if you have appreciated property is to create a charitable remainder unitrust for a term of 20 years with income payable to children. For example, John and Mary Jones had three children and owned property with a value of $250,000. Because they had paid $50,000 for the property, they were reluctant to sell and pay a capital gain tax of over $30,000.
A much better plan for John and Mary was to transfer the property to a charitable remainder trust paying 6% to their three children for 20 years. They received an income tax deduction of approximately $75,000 and bypassed the capital gains tax. The children each received one-third of the 6% income for 20 years and their total income was approximately $330,000. After the 20 years, the trust had grown to $305,000 and it benefited the favorite charities of John and Mary.
John and Mary were able to enjoy very large tax savings now, transfer an income stream to children for 20 years and eventually benefit their favorite charities. Mary particularly appreciated the ability to give an income stream because one of the three children tended to "spend money like water" and had the opportunity over 20 years to acquire better financial management skills.
Conclusion
Gifts to children can accomplish many objectives. They allow you as a parent to help children while you are living. It gives the children opportunity to learn good management and investment principles. You also have a better understanding of how a future inheritance will be used by children.
For a free copy of the COTA Guide to Estate Planning brochure, simply email rick@cota.org. Or, call Rick Lofgren at 800.366.2682 for immediate assistance. The brochure will be mailed to you immediately, and our staff will be happy to work with you should you have questions.
This article is for information purposes and is not binding tax or legal advice. Please consult with your tax advisor for specific items to discover how they impact your situation.
Are you a natural organizer? Do people look your way when it comes time to get something done? If so, you are the right person to organize an activity to raise funds for COTA! COTA makes it easy for you.
The end of summer and the beginning of fall are the perfect time to plan outdoor activities. The heat has subsided and the weather can be just right.
Here are some ideas:
Sports Tournaments
Volleyball, softball, croquet or horseshoes. Any sport is a possibility. To narrow the list, ask these two important questions: What is popular with the people in my community? Where do my volunteers and I have experience, connections or interest? Then take that interest and experience and build a tournament.
Music Concerts
A small concert in the park with a free-will offering can generate a new audience for the performers and funds for COTA.
Golf
If golf is your game, why not organize a golf tournament to raise funds for COTA? To set your golf outing apart, consider a twist or two. Consider a golf outing at a miniature golf course. Or ask a local celebrity to participate. Or add a game or two on the course.
One idea from a COTA outing in South Carolina is to allow the male golfers to hit from the ladies tee at one hole. The catch? In order to hit from the shorter yardage tee, it costs $20 and the foursome must don dresses and have their picture taken before teeing off. This twist added a lot of laughs and great memories (as well as a few extra dollars!).
What summertime activity makes you smile and gets your heart racing?
Bicycling? Music? Sports? Barbecue?
All of these, and more, can be fundraising opportunities.
Interested? The next step is easy. Simply email MiracleMakerInfo@cota.org and tell us about your idea.
We will help you get started. COTA provides the blueprint; you provide the fun. And if you are not ready to plan an event on your own, email us and we will connect you with a COTA activity in your area.
For more fundraising ideas and opportunities, email Doug Lippert at
or call 800.366.2682, extension 225.
Let us know how you are implementing COTA’s fundraising ideas/tips, or how you are creating your own ways of raising funds for COTA. To share what you are doing as a COTA Miracle Maker, please contact us at 800.366.2682 or log onto www.cota.org and click on the Contact Us link.
When transplant families talk about transplant expenses, they usually hear “doesn’t insurance
cover that?”
The reality is that while health plan or assistance programs may cover some or all of the medical costs, there are many other expenses that are not covered. These related expenses are the sole responsibility of the family -- and they can add up to tens of thousands of dollars.
That is why COTA exists. COTA assists families by providing fundraising assistance to children and young adults who need a life-saving transplant. COTA defines ‘transplant-related expenses’ as expenses a family incurs due to the health issue that causes the transplant. These expenses begin to build before the transplant and continue long after the transplant. Examples include: co-pays and deductibles; transportation to and from the transplant center; household expenses at the transplant center and at home while a parent is out of work due to the transplant, and medications.
Consider this scenario: Mom and dad are both employed when they learn that their child needs a life-saving transplant. The transplant center is 200 miles away, requiring a parent and the child to live near the transplant center so when an organ becomes available, the patient is close to the hospital. So Mom takes an unpaid leave-of-absence from her job and finds an apartment near the hospital.
In this scenario, the family will be paying household expenses at home with half the family’s regular income. In addition, they will be maintaining a second home at the transplant center. And, they will have transportation costs as the family goes back-and-forth between the two ‘homes’. None of those expenses will be covered by their insurance. Add to that the 10% to 20% deductible they will pay for medical expenses, and you can see how expenses can add up quickly.
This is where COTA can help. As Shannon Flies, mother of COTA patient Treyton Miller, recently explained:
Even though it seemed like we had been blessed with the medical side of things taken care of, life was still going on as usual back home and we weren’t going to be there to take care of it. What about our rent? What about all our bills? What about our travel to and from Chicago? The answer to all of those questions
was COTA.
That’s where our COTA Miracle Makers come in. COTA relies on individuals and groups to help raise funds that pay those transplant-related expenses. And, because 100% of all funds raised for patients is used for patients, what you do will have a great impact on transplant families.
It’s easy to get involved:
Make a donation to help a COTA family. Click here to go to the secure online donation page. Your gift is tax deductible and will help give hope to families.
Ask COTA to help you find a patient community campaign in your area. You can join the efforts of a community campaign and help a local family.
Organize your group to raise funds for COTA families. We can provide resources and ideas. Just ask. Call or email COTA to learn more.
For a complete list of fundraising guidelines and resources available to help you plan an event to raise funds for COTA, contact Doug Lippert at
or by calling 800.366.2682 extension 225.
Funds Available for Patients’ Transplant-Related Expenses Funds raised through the Children's Organ Transplant Association in honor of patients are available for ongoing transplant-related expenses, including post-transplant expenses.
Daniel Yara is a survivor. Throughout his long transplant journey Daniel kept a smile on his face -- even on bad days. Early in life, Daniel was diagnosed with Dyskeratosis Congenital (DC), which is a rare genetic disease that affects literally only one in a million people. Daniel is the youngest of four children and he is the only family member affected by this horrible disease. Daniel’s first major battle against DC occurred in March 2000 when he was diagnosed with Aplastic Anemia, which required that he receive a bone marrow transplant. Fortunately his brother was a match and was the donor.
When transplant families talk about transplant expenses, they usually hear “doesn’t insurance
cover that?”
