Planned giving is a great a way for a donor to leave a legacy. While planned gifts can assume the form of cash or securities, they typically are made in the form of will bequests, charitable trusts, and gift annuities. The intended purpose of the gift can be to endow a scholarship or staff position, to support a specific program, or for day to day operations of our center.
The essential part of a planned gift to Central Outreach and Advocacy Center is not the method of giving but the intent of the giver. A planned gift not only helps to make a significant difference in a our guests’ lives but also creates a legacy that illuminates the generosity of the donor while helping to ensure an ongoing future for Central OAC.
Types of Planned Gifts
Bequest in a Will
Outright bequests, as well as certain bequests in trust, are not subject to estate taxes. Bequests can take any of the following forms:
A. Bequest of a dollar amount, particular securities or other property.
B. Residual bequest of all or a portion of an estate after payment of specific amounts to other beneficiaries.
C. Contingent bequest to take effect if beneficiaries die before the testator.
A bequest can often be arranged simply with the addition of a codicil amending an existing will.
Life Income Trusts
With a life income trust, assets are places in a trust and the donor retains the right to designate the income beneficiary. At the end of the trust, the remainder goes to Central OAC. Tax deductions depend upon the value passed to Central OAC. The advantage of life income trusts is there is flexibility in the type of property that can be donated, and it can provide a fixed amount of income (Charitable Remainder Annuity Trust) or a variable level of income (Charitable Remainder Unitrust).
Charitable Lead Trusts
With a charitable lead trust, a donor can fulfill a gift pledge while reducing estate and gift taxes that might otherwise accrue on assets passing to heirs. Assets are placed in a trust and Central OAC receives income for a period of time. Assets are then returned to the donor or other beneficiary at end of the designated period.
If you have a life insurance policy that your heirs don’t need, you can make Central OAC the designated beneficiary of the policy. Policy proceeds are deductible for your estate tax purposes. You may also receive a current income tax deduction for the premiums paid by making Central OAC the owner of a policy.
Qualified Benefit Plans (including individual retirement accounts and 401K plans):
When IRA assets are given through an estate, the value is included in the estate’s assets, but the full charitable deduction offsets the value so no estate tax is due. If IRA assets are left to heirs, they can be subject not only to estate tax, but also income tax, taking a significant portion of the IRA’s value. Consider making Central OAC the beneficiary of your qualified benefit plan, thereby avoiding both the income and estate tax which would otherwise be payable on these benefit plans.
Donors should consult with their own financial and tax advisors before finalizing gifts.
For more information about these other giving options please contact Communications & Outreach Coordinator, Brenna Lakeson, at [email protected] or (404) 601-3172.