Planned Giving

IMG_1568There are many ways one may consider giving a gift of significance.

Gifts of Cash: Cash gifts are the most common and the easiest way to give. All you have to do is write a check in our name. Every dollar you give outright for our work is tax deductible. So, if you give $1,000 this year, it actually only costs you $650 if you are in a 35% tax bracket. Cash gifts are deductible up to 50% of your adjusted gross income.

Gifts of Appreciated Securities: If you have appreciated marketable securities you have held more than one year, the tax laws make it possible to make a significant gift with remarkably low after tax costs.

Rules for contributing appreciated securities and property:

  • The full fair market value of the security or property held more than one year is deductible in the year of the gift.
  • If the gift, combined with other gifts, exceeds 30% of your adjusted gross income, the excess can be carried over and deducted in up to five subsequent years.
  • You may deduct the full fair market value of the asset and pay no capital gains tax on the appreciation.
  • If you contribute assets other than publicly-traded stocks, you will need a qualified appraisal if the value is over $5,000.
  • Consult your advisors on tax-related matters affecting your specific situation before making a significant gift.

Gifts of Closely Held Stock: Call our office for detailed information on how the owner can receive a substantial benefit from his/her company, not have to pay any tax, and assist in our programs as well.

Gifts of Real Estate: Gifts of real property held long term yield tax benefits almost identical to gifts of appreciated securities.

  • You avoid capital gains tax on your appreciation.
  • You receive an income tax charitable tax deduction equal to the full fair market value of the property.
  • Discuss any real estate gift with you advisors to ascertain the tax implications for your gift.
  • Call us to discuss any gift of real estate.

Life Insurance Gifts: Life insurance is a remarkable asset. It grows tax free and heirs generally receive the proceeds free of income tax. It provides liquidity for your estate and you can borrow against it. Life Insurance also can be used to make significant gifts with exceptional tax advantages.

Gifts of an “Unneeded” Policy: Let’s assume your family is grown and you no longer find it necessary to retain a policy purchased many years ago. You can make us owner and beneficiary of the policy and continue to pay the premiums. You’ll get an immediate charitable tax deduction for the cash value plus you’ll gain additional tax deductions for the premiums you pay in future years. The full face value, with no reduction for estate tax, will come to us to benefit future generations. To make a life insurance gift, ask the insurance company for forms that will change the beneficiary and ownership designations, and send us the policy.

Wealth Replacement Plans: Friends who wish to replace contributed assets in their estates can purchase life insurance payable to family members, funded in part by tax savings from their charitable deductions. The life insurance replaces the value of the asset that we receive, and if you employ a so-called irrevocable life insurance trust, your family can receive the insurance proceeds free of gift or estate tax.

Gifts that provide a lifetime income to the donor:

  • Charitable Remainder Unitrusts: A charitable remainder unitrust is an arrangement into which you irrevocably place cash, securities or other property, but keep a variable income-usually for life, but sometimes for a term of years. When the trust ends, the property in the trust passes to us. You can receive a substantial current income tax deduction for the present value of the remainder interest that comes to us in the future. Depending on the trust arrangements, many other advantages are available.
    • Increased income for your family
    • Capital gains tax avoidance
    • Favorably taxed income
    • Deferral of income until you are retired and in a lower tax bracket
    • Federal estate tax savings
    • Avoidance of gift tax
    • Professional investment of your funds
    • A hedge against inflation
    • Reduced estate settlement costs
    • Meaningful support for our programs

* Life insurance as “Wealth Replacement” works well with unitrusts.

  • Charitable Remainder Annuity Trust: The charitable remainder annuity trust has many of the same benefits as the unitrust. The difference being that the income benefit is fixed at a percentage of the initial trust principle rather than a variable annual income. Call us for more information. We will be happy to discuss how the unitrust or annuity trust may benefit your family.

For information or to discuss these gift ideas please contact:

JoAnn Hagemeier, Director of Development

development@ourladyofthehills.org

830-895-0501