| Question |
Answer |
| 1. What is a GASB split interest agreement? |
A GASB split interest agreement is a financial arrangement between a donor and a non-profit organization, typically involving the donation of a charitable gift annuity or a charitable remainder trust. |
| 2. What are the legal implications of entering into a GASB split interest agreement? |
When entering into a GASB split interest agreement, it is important to consider the legal implications, such as compliance with IRS regulations, state charitable solicitation laws, and fiduciary duties. |
| 3. How does GASB require split interest agreements to be reported? |
GASB requires split interest agreements to be reported in the financial statements of the non-profit organization, disclosing the fair value of the assets received and the present value of the expected future cash flows. |
| 4. What are the potential risks and benefits of a GASB split interest agreement? |
There are potential risks and benefits associated with GASB split interest agreements, including investment risk, tax benefits, and potential impact on the financial position of the non-profit organization. |
| 5. How can a non-profit organization ensure compliance with GASB standards when dealing with split interest agreements? |
Non-profit organizations can ensure compliance with GASB standards by maintaining accurate records, conducting regular valuations of assets, and seeking professional guidance from legal and financial advisors. |
| 6. Are there specific disclosure requirements for GASB split interest agreements? |
Yes, GASB requires specific disclosures in the financial statements of non-profit organizations, including details about the nature of the split interest agreements, valuation methods, and assumptions used. |
| 7. What are the key considerations for non-profit organizations when negotiating GASB split interest agreements? |
Key considerations for non-profit organizations include assessing the financial capacity to assume the obligations, evaluating the potential impact on the mission and operations, and ensuring alignment with the organization`s strategic goals. |
| 8. Can a GASB split interest agreement be modified or terminated? |
Yes, GASB split interest agreements can be modified or terminated under certain circumstances, subject to compliance with legal requirements, donor intentions, and fiduciary responsibilities. |
| 9. What are the tax implications of a GASB split interest agreement for donors and non-profit organizations? |
The tax implications of GASB split interest agreements vary based on the specific terms and structures, and it is essential for both donors and non-profit organizations to seek professional tax advice to understand the potential impact. |
| 10. How can legal counsel assist non-profit organizations in navigating GASB split interest agreements? |
Legal counsel can provide valuable assistance to non-profit organizations by offering expertise in drafting, reviewing, and interpreting GASB split interest agreements, as well as addressing any legal challenges or disputes that may arise. |
Split interest agreements refer to arrangements where a donor transfers assets to a charitable organization, while retaining an income interest in the assets transferred. In this contract, the parties involved will establish the terms and conditions of the split interest agreement in accordance with the regulations set forth by the Governmental Accounting Standards Board (GASB).
| Article III – Terms Conditions |
| 3.1 The Donor shall transfer assets to the Charity, while retaining an income interest in the transferred assets, as outlined in the split interest agreement. |
| 3.2 The Charity shall manage and utilize the transferred assets in accordance with the terms specified in the split interest agreement and in compliance with GASB regulations. |
| 3.3 The Trustee shall oversee the administration of the split interest agreement, ensuring compliance with the terms and conditions set forth by the Donor and the Charity, as well as with GASB regulations. |
| 3.4 Any modifications or amendments to the split interest agreement shall be made in writing and shall require the consent of all parties involved, as well as compliance with GASB regulations. |
