Many of us would like to make significant gifts to further the causes in which we believe. But due to the needs of our own economic security as well as our family’s, such gifts do not seem possible. However, through planned giving, many donors find that they can fulfill both of their desires—ensure financial security for their loved ones and their charities.
Planned gifts are usually deferred, meaning they are arranged now and fulfilled later. For example, a person could include a provision in his or her will to make a bequest to the Sara Holbrook Community Center (SHCC). That arrangement would be a planned gift.
Other planned giving options include designating the SHCC as a beneficiary of your insurance policy or retirement plan or establishing a Charitable Trust. There are many ways to support the SHCC through your estate plan, and some may even allow you to provide more than you may have first considered. Some key characteristics of the most popular options are described below.
BEQUESTS AND RETIREMENT PLANS: A will provision allows you to make a substantial contribution to the SHCC without diminishing the assets available to you during your life. Since bequests are deductible from your taxable estate, significant estate tax savings may be possible. If you name the SHCC as a beneficiary of your retirement plan, you also avoid income tax when the SHCC receives its share of your plan.
CHARITABLE REMAINDER TRUSTS: You can use an irrevocable trust to provide yourself and/or a loved one with a fixed annual income or an income that varies with the value of the trust. Part of your gift qualifies for an income tax deduction, as calculated with IRS tables. At the death of the last income beneficiary, the corpus of the trust is distributed to your fund at the SHCC.
CHARITABLE LEAD TRUSTS: You can support the SHCC and other charities for a term of years or for the life of an individual by creating a charitable lead trust. Income will be paid to your fund at the SHCC each year during the term of the trust. When the trust terminates, the assets in the trust revert to you or individuals you wish to benefit.
REAL ESTATE WITH RETAINED LIFE ESTATE: A residence or other real property may be given as an outright gift, or you may prefer to give your residence, farm, or vacation home and retain the right to occupy it for life. You get a charitable deduction in the year you arrange your gift.
LIFE INSURANCE: When you give a life insurance policy to the SHCC, the cash surrender value of the policy or the cost of a replacement policy is deductible as a charitable contribution. If you continue to pay premiums after your gift, these premiums are also deductible.
The purpose of this document is to provide only general information. Planned giving typically requires legal documents and the assistance of a qualified, financial advisor and/or a lawyer to complete. Because of the size and potential impact of planned gifts, a donor should always consult his or her professional advisors before proceeding.
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