Giving Programs

An irrevocable gift that may be funded with cash or appreciated assets (stocks, bonds, real estate, tangible personal property). Charitable Remainder Unitrust specifies that income beneficiary (recipient) is to receive annual payments determined by multiplying a fixed percentage (which cannot be less than 5%) by the net fair market value of the trust assets, as determined each year. On death of beneficiary (or survivor beneficiary, if more than one,) charity gets the remainder. Tax benefits include charitable income tax deduction, capital gains tax avoidance, and estate tax reduction.

Charitable Remainder Annuity Trusts

An irrevocable gift that may be funded with cash or appreciated assets (stocks, bonds, real estate, tangible personal property). Specifies a fixed dollar amount (at least 5% of initial fair market value of transferred property), which is to be paid annually to income beneficiary (recipient for life). On death of beneficiary (or survivor beneficiary, if more than one) charity gets the remainder. Tax benefits include charitable income tax deduction, capital gains tax avoidance, and estate tax reduction.

Charitable Lead Trusts

An irrevocable gift that may be funded with cash or appreciated assets (stocks, bonds, real estate, tangible personal property). Similar to charitable remainder trust, however, payments are made to charity for a life or a predetermined number of years. Remainder interest is paid to family members or other non-charity remainderpersons. Tax benefits include possible charitable income tax deduction and possible estate and gift tax reduction.

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Gift Annuities

A donor irrevocably transfers money or an appreciated asset (stocks, bonds, real estate, tangible personal property) to a charitable organization in return for its contractual obligation to pay the donor, another or both, fixed, guaranteed payments for life. Tax benefits include charitable income tax deduction, partial avoidance of capital gains tax, potentially tax free income, and estate tax reductions.

Deferred Payment Gift Annuity

Deferred Payment Gift Annuity. A donor irrevocably transfers cash or an appreciated asset (stocks, bonds, real estate, tangible personal property) to a charitable organization in exchange for its promise to pay an annuity to the donor, another or both, to begin more than one year from the date of transfer. The donor is able to make a gift now and get an income tax charitable deduction when he or she is in a high tax bracket, deferring payment until those years when the donor may need the income more (e.g., after retirement) and may be in a lower income tax bracket.

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Life Estate Gifts

Donor can obtain income and tax benefits by making an irrevocable charitable gift of his personal residence or farm even though he or she retains the right to use the property for life. A life estate may be retained for one or more lives, or may be retained for a term of years. Tax benefits include capital gains avoidance, charitable income tax deduction, and estate tax reduction.

Bequests

The most common type of planned gift. A bequest is a gift through your will that can be either a fixed amount or a percentage of testamentary assets. It can be directed to family, friends, charitable organizations, etc.

Testamentary charitable bequests can be made outright or structured using any of the gifting methods discussed above.

A specific bequest of a dollar amount.
A specific bequest of a percentage amount.
A bequest of the "residue" of the estate (what's left after specific bequests).
A bequest of income to charity for a term of years via a trust that ultimately is distributed to heirs (such as grandchildren, etc.)
A bequest of income to family via a trust with the trust remainder ultimately going to charity.
A bequest to family of the right to use property (such as house or farm) with the property ultimately going to charity.

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Charitable Gifts of Life Insurance

Life insurance has always been an integral part of the comprehensive estate plan. From this ever innovative industry, life insurance has become a valuable asset within the overall financial portfolio now offering competitive rates and as much utility as other assets. Life insurance figures prominently in charitable gift planning as well. Often utilized in wealth replacement estate plans, life insurance policies can also directly benefit charity. With little out-of-pocket expense to donor, a charitable gift of life insurance can provide significantly to charity through an outright gift of a paid-up policy or an outright gift of a whole life policy.

Outright Gift of Paid-Up Life Insurance Policy

A gift of a paid-up life insurance policy can be made by naming the charity as beneficiary and transferring ownership of the policy to the named charity.
The donor receives a charitable contribution deduction for the replacement cost of the policy at the time of the gift.
Transferring ownership of the policy to charity may reduce a donor's estate thus avoiding federal estate taxation of the asset.
Charity can cash the policy at any time or receive the full death proceeds at donor's passing free of income or estate taxes.

Outright Gift of a Whole Life Policy

Donor purchases policy naming charity as beneficiary and subsequently transfers ownership of the policy to charity.
Donor gives amount equal to annual premium to charity and charity in turn pays the premiums.
The gift is made on an "installment" plan and Donor receives a charitable contribution deduction for each annual gift.
Gift is not part of Donor's taxable estate, and therefore avoids federal estate tax.
Gift goes directly to charity and is not subject to probate or attachment by heirs.

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To learn more about the Anglers' Giving Programs, please contact Jay Gleason at jaywgleason@email.msn.com

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