Planned Giving
WHAT IS PLANNED GIVING?
“Planned giving” is a term commonly used to describe a wide variety of giving vehicles that allow you to give to charity during your lifetime and/or after your death, while meeting your current income needs and providing for your heirs. Planned giving is typically done in conjunction with estate planning, and is a viable option for donors of all income levels.
From a donor’s perspective, planned giving is attractive for many reasons. It may allow you to make larger gifts than you otherwise could out of your current assets. Depending on how a planned gift is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains taxes. Planned gifts often appeal to people who want to benefit a charitable organization but aren’t certain how much of their assets they’ll need for themselves during their lifetimes.
PLANNED GIVING OPTIONS:
• Gift Annuities
• Charitable Remainder Trusts
• Charitable Lead Trusts
• Charitable Bequests
• Beneficiary designations
Gift Annuities
A charitable gift annuity provides you with lifetime income. To establish a gift annuity, you contribute funds or assets to a nonprofit organization, and that nonprofit in turn makes fixed annuity payments to you from its general assets for the rest of your life. You receive an immediate income tax deduction for a portion of the gift, and a portion of each annuity payment is treated as a tax-free return of the investment. The portion of the gift not used for payments benefits the nonprofit organization.
Charitable Remainder Trusts
A charitable remainder trust allows you and/or other designated beneficiaries to receive income from a trust for your lifetime(s), or for a period of years not to exceed 20. At the end of that time, the balance of the trust is transferred to a charity that you have selected. You can take a charitable deduction for a portion of the gift you make to the trust in the year the trust is formed. (In some cases, additional funds may be added in later years.) The two most common types of charitable remainder trusts are annuity trusts and unitrusts, which differ in how the income you receive from the trust is calculated and distributed.
Charitable Lead Trusts
A charitable lead trust allows you to designate a charity to receive a regular, fixed amount from a trust for a specified time period or the lifetime of a designated person. At the end of that time period, the remainder of the trust passes to your designated heirs or other non-charitable beneficiaries.
Charitable Bequests
The term “charitable bequest” is used to describe anything you give or leave to charity from your estate through a will or a revocable inter vivos (“living”) trust. An “estate” is any property, money or personal belongings that you may have at the time of your death. Most people leave an estate when they die, even though they may not have a great deal of wealth. Even an individual with a small estate can arrange to leave a charitable bequest.
You can arrange to bequeath a gift from your estate in several different ways. You can set aside a specific dollar amount, leave a percentage of your estate, or leave any assets left over after your family has been provided for. Some people use a bequest to give a charity something they own, such as a car, home, art or jewelry. Others leave a paid life insurance policy or other financial investments, such as stocks, bonds or CDs. These gifts may provide tax savings.
Beneficiary Designation
By designating a charity as the beneficiary of your life insurance or retirement assets, you can enjoy some flexibility in your charitable giving as well as certain tax advantages. The charity will receive the specified assets upon your death, and you have the option of changing the eventual recipient throughout your life.
For more information please check out the link below or call Jill Haiser @ 248-476-9550
Calculate a charitable deduction: http://faithfulsowers.giftlegacy.com/plgive_main.jsp?WebID=GL2005-0339