Planned Giving
Planned gifts can be as simple as a gift of cash or as sophisticated as a charitable trust or foundation that is integrated into a multi-faceted financial and estate plan.
In order to make the greatest impact to both the organization you wish to support and provide the greatest benefit to yourself, you must first decide what your ultimate goals are and how you plan to accomplish them.
Following are some of the many different options you can partner with YFS through planned giving, along with securing your own future and providing a future for the kids in our community.
Wills and Bequests
Wills/bequests are provisions in your will or revocable living trust that designate how your assets will be distributed after your lifetime.
Appreciated Assets
The gift of an asset (common stock or mutual fund shares), is a beneficial way to make a contribution to a
charitable organization and receive tax benefits based on the value of the asset(s).
Appreciated assets often involve stock. Other marketable assets, such as land, antiques, and homes, can be utilized as potential gifts with the possibility of valuable tax benefits.
Charitable Gift Annuities
A charitable gift annuity can provide tax benefits now and a lifetime income for the donor and a beneficiary if desired.
Charitable Remainder Trust
A charitable remainder trust is established when property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living. The beneficiaries receive the income and the charity receives the principal after a specified period of time. A charitable remainder trust is irrevocable; once established, it cannot be changed. If desired, the income period of the trust can be established for a specified period of time not to exceed 20 years. The 20-year maximum doesn’t apply if the trust life is based on the life expectancy of the income beneficiary (-ies).
A charitable remainder trust is an attractive planning tool for the disposal of highly appreciated assets. While the assets revert to the charity rather than the heirs of the estate, the use of an irrevocable life insurance trust in conjunction with a charitable remainder trust could replace the assets' value for the heirs.
There are three different types of charitable remainder trusts:
- Charitable Remainder Annuity Trust (which pays a fixed dollar amount Annually)
- Charitable Remainder Unitrust (which pays a fixed percentage of the trust's value annually)
- Charitable Pooled Income Fund (which is set up by the charity, enabling many donors to contribute)
Testamentary Trusts
Gifts made through a testamentary trust should be structured as part of your overall financial and estate plan. They can be an integral part of your gift planning and also meet the special needs of your heirs. A testamentary trust only becomes effective and irrevocable at the time or your death. Because these gift types may be complex, you should always involve your legal and financial advisors to implement a workable plan.
The typical donor:
- Needs assets available during life.
- Wants to benefit heirs first with an income stream followed by a significant gift.
- Creates a gift as part of an overall estate plan.
Gifts features and benefits:
- Full or partial gift or estate tax deduction
- Flexible estate planning
- All assets available during life
- Revocable during life
Gift Annuity Benefits
- As a portion of the annuity is a gift, you'll receive an income tax deduction for the gift if you itemize.
- A portion of the annual annuity income is exempt from Federal taxes.
- You may save tax on the capital gain (profit from an investment).
- You avoid estate taxes, probate, and costs on the amount involved.
- The charity will have the use of the funds after the beneficiary's lifetime.
- The payments are fixed and will not fluctuate with interest rates.
- Your annuity is as safe as the organization you invest with, for the total assets of the organization stand behind their agreement to make payments to you.
- Generally the funds used to set up a charitable gift annuity may be structured as an unrestricted gift or to fund a particular item or program that is important to you (with the consent of the charity).
