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Who
can help me arrange for a gift? top
If you have a professional
you’re working with like a financial planner, lawyer, accountant or insurance
agent, please talk with them about leaving a gift. A professional can tell you
about the tax benefits of planned gifts. You can also call the development
department of a charitable organization for help.
How
do I leave a gift in memory of a person or for a specified purpose?
top
A gift is a wonderful way to
recognize someone who has made a difference in your life. You may also want to
give to a specific cause like research or to a new building. This kind of
memorial gift can be arranged in your will, the same way that you would leave a
personal gift from your estate. You just need to make it clear that the gift is
given in memory of a particular person or for a specific use.
Do
I tell the charity I’ve left the gift? top
This is up to you. Charities often
like to know in advance so they can recognize your generosity. They can also
tell you about specific opportunities for giving. Whether you let the
organization know of your plans or not, is your decision to make.
Take
the first step. top
Think about to whom and why
you’d like to leave a gift. Maybe you or someone you know has been helped by a
particular organization. Maybe you’re an active volunteer or believer in the
mission. You might want to leave a gift in memory of a loved one or for a
specific use.
If you need more help or you need
to know more about a particular organization, do some investigating before
leaving a gift. Call the nonprofit group of your choice. They can help you
better understand what they do and what opportunities are available for giving.
Contact your professional advisor
for help. Your advisor can make sure you are getting the maximum tax and legal
advantages allowed for your gift. If you do not have one call the LEAVE A LEGACY™
Coordinator closest to you. top
Ten Ways to Reduce your Taxes & Make a Gift top
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1.
Appreciated Stock
Appreciated
Stock makes an excellent charitable gift. Under current tax laws,
when an appreciated asset (such as stock) is sold, a capital gains tax
is due. By making a charitable gift of the appreciated stock, you can
avoid or delay the capital gains tax. You can also take an immediate
income tax deduction for the current fair market value of the stock,
no matter what was originally paid for it.
To
take a deduction for gifts of appreciated stock at their current value,
you must have owned the stock for more than 12 months. Such gifts are
deductible up to 30 percent of your adjusted gross income (AGI) in the
year of the gift. Any unused deduction amounts may be used in as many
as five subsequent
tax years.
2. Bequest through Will
One
of the most simple and popular ways to make a gift that will live after
you is to give through your will. You
can make a gift bequest to benefit this organization by providing a
dollar amount, specific property, percentage of your estate, or the
remainder (what's left). Such a designation can reduce your estate taxes.
In many cases, a simple change to your will can add this organization
and does not require rewriting your most recent will.
3. Charitable Remainder Trusts (Annuity and Unitrusts)
Donors
and spouses can benefit from lifelong payments from such a trust. The
donor selects the rate of return from these income arrangements and
also chooses a fixed or fluctuating annual payment to be made to the
designated parties as long as they live. Capital gains tax may be completely
bypassed and you will receive a tax deduction based on the age of the
income recipient and the rate of return chosen.
4. Charitable Lead Trust
In a charitable lead trust, assets (generally cash or securities) are
transferred to a trust that pays income from the fund to this organization
for the number of years you select. At the end of the designated time
period, the trust terminates and the assets are given back to the person
you name. This trust helps to lower estate and gift taxes that would
otherwise be due on the assets. This option is especially attractive
if you want to leave your children or grandchildren assets in the future,
but not immediately.
5. Gift Annuity
In
exchange for a gift of cash, stock or securities, this organization
will pay you, you and your survivor, or another person named by you,
a guaranteed income for life. In addition, you receive a substantial
income tax deduction in the year of the gift and part of the annual
payment is non-taxable. Your annuity payment and tax deduction are based
on the age and income of the recipient.
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6.
Deferred Gift Annuity
A deferred gift annuity is similar to a gift annuity except that payments
begin for you at a future date of your choice, such as your retirement.
Your tax deduction and the annual rate of return on your annuity increase
the longer you wait to start payments. This is an excellent retirement
planning method to implement during prime income producing years that
will benefit you in your retirement years.
7. Life Insurance
Insurance is another simple way to make a substantial future gift at
a level that would not be possible at the same level in cash. Name this
organization the owner and beneficiary to receive the proceeds of an
existing life insurance policy. You will receive a tax deduction for
approximately the cash surrender value, thereby reducing your tax liability
in the year of the gift.
An
alternative is to purchase a new life insurance policy naming this organization
as owner and beneficiary. With this option, you receive an income tax
deduction for each premium made and make possible a major gift to this
organization with a modest annual payment (or one-time premium payment).
8. Retirement Accounts and Pension Plans
Account
funds (IRAs or company plans) beyond the comfortable support of yourself
or loved one may be given (like life insurance proceeds) to this organization
by proper beneficiary designation. Large pension plan assets can be
subject to double or triple taxation (federal estate, federal income,
and state death and state income tax) that virtually eliminates the
benefits to heirs if tax-wise alternative planning is not arranged.
9. Real Estate
For
some people, a gift of land, primary residence, or vacation home is
a preferred way to make a gift. You will receive a tax deduction for
the full fair market value, avoid all capital gains tax and remove this
asset from future estate taxes. Once option is to give real estate while
you retain a life tenancy. This provides a substantial income tax deduction
by giving (deeding) your home or farm to our organization now. You continue
to live there, maintain the property as usual, and even receive any
income it generates. At your death the property will be sold by this
organization and the proceeds will support our mission.
10. Creative Combinations
With
planned gifts, one size does not fit all. Depending upon your specific
circumstances and objectives, you may use one or even several planned
giving options to achieve your goals. Other planned giving strategies
beyond the methods described here may be tailor-made just for you!
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