Types of Planned Gifts
Planned giving helps donors to contribute to a charity such as the St. Vincent de Paul Society and simultaneously give more of their assets to their family than would otherwise be possible.
Planned giving provides several tangible benefits to donors, depending on the specific plan:
- Income tax deductions
- Reduced or eliminated capital gains taxes
- Lifetime incomes for yourself and your spouse
- Reduced or eliminated estate taxes
- Preserved financial assets
- Reduced or eliminated gift taxes
The most common types of planned gifts are:
Outright Gifts
Cash, appreciated securities or closely held stock may be donated outright or pledged over a period of up to five years. If donors itemize their tax deductions, the gift is fully deductible up to 50% of their adjusted gross income. Any excess may be carried forward for up to five additional years.
Wills and Bequests
We can be named as a beneficiary in your will in a number of easy ways. You can specify an outright gift as a designated dollar amount or a percentage of your estate. we couldbe named as a remainder beneficiary receiving funds only after specific sums are paid to individual beneficiaries.Your current will does not have to be redrafted to add us. This can be accomplished with and amendment called a codicil. Planning Your Will
Life Income Gifts
Using life income gifts, a donor transfers cash or appreciated assets to the Society which, in turn, pays a reliable, steady stream of lifetime fixed income back to the donor. Because of built-in tax savings, the donor usually receives a higher rate of return than from other life income investments. Included are gift annuities and pooled income funds, which can earn the donor income capital gains and estate tax savings.
Remainder Trusts
Remainder trusts provide a donor with a lifetime income and a charitable income tax deduction. The first type is an annuity trust, which pays the donor a fixed, guaranteed dollar amount every year regardless of the trust’s investment performance (like bonds). The second type is the unitrust, which pays the donor a predetermined percentage of the fair market value of the trust’s assets as revalued annually (like stocks). Real Estate
Owners of residential or commercial real estate can donate their property to the Society in two ways. An outright property gift qualifies the donor for a charitable income tax deduction based on the appraised value of the property. With a retained life estate contract, the donor makes a gift of a personal residence to the Society but retains the right to live in the home for life. The life estate gift creates an up-front charitable income-tax deduction based on the “present value” of the home going to the Society on the donor’s death. The Charitable Remainder
Retirement and Personal Planning
In 2006 and 2007, we learned about the IRA Charitable Rollover – the option to order a distribution from an IRA directly to our organization. The distribution was excluded from the IRA owner’s income for federal tax purposes, though it did count towards the owner’s required minimum distribution for that year. Donors really appreciated the simplicity of the IRA Charitable Rollover. But Congress had put a time limit on the IRA Charitable Rollover and this opportunity closed at the end of 2007…
But the IRA Charitable Rollover has returned! Congress revived it with a new law, and this giving opportunity is now available through the end of 2009. Here are some details about the IRA Charitable Rollover for your consideration. Retirement and Personal Planning
Lead Trusts
Income in a lead trust is paid first to the Society and, after a period of years, the remainder is returned to the grantor (grantor lead trust) or to the grantor’s heirs (non-grantor lead trust). The grantor lead trust offers a substantial income tax deduction to the donor while the non-grantor lead trust enables the heirs to avoid potential gift and estate taxes.
Life Insurance
An existing life insurance policy may be donated or a new policy could be established that names the Society as the owner and beneficiary. Various income-tax benefits are available to donors who make life insurance gifts to the Society.
Gifts Through Your Real Estate
A gift through your estate is a versatile way to donate a variety of assets including cash, securities, real estate and tangible personal property. Donations can be made through a will or trust, which distributes your gift in any desired amount or proportion. Several types of bequests are included, which allow donors to make a major gift while preserving assets during their lifetime and reducing federal estate taxes.
Gift Annuities
Each year thousands of caring individuals use the charitable gift annuity to provide major financial support for important charitable organizations. In many cases, this time-tested technique has permitted gifts that otherwise might not have been made. Elizabeth, age 70, is a good example. Although she has always wanted to make a significant gift to her favorite charity, she feels she cannot afford to lose any income. Through a gift annuity arrangement she is able to give $10,000 to a charity which, in turn, commits itself to pay her an income of $570 a year for as long as she might live. Moreover, her annuity payments will be favorably taxed. Elizabeth’s gift also will result in an immediate income tax savings from the charitable deduction. For Elizabeth, a charitable gift annuity presented an opportunity to do more for herself and charity. Gift Annunities
Estate Planning:
How Have Tax Law Changes Affected Estate Planning?
Years ago, Congress passed laws that severely impacted estate planning: Estate tax rates have gradually lowered, and the estate tax credit (equal to an exemption) has increased since the laws went into effect in 2001. But has the need for estate planning gone away? The 2001 laws have various phase-in and phase-out provisions that affected the estate tax over the past nine years (2001-2009). In fact, the biggest change of all is still scheduled to happen – In 2010, there will be no federal estate tax at all. No problem, right? But, Congress did not make these estate tax laws permanent. In 2011, the estate tax laws “sunset” and the laws revert to tax rates and credit amounts before the 2001 laws went into effect. So we will be back where we started in 2001… unless Congress passes a new estate tax law. Estate Planning