Options for Giving—Deferred Gifts

Bequests

• Outright bequests, as well as certain bequests in trust, are not subject to estate taxes.
• Actual cost is less than face value of gift because of tax benefits to estate.
• Bequest can take any of the following forms:
  • Bequest of a dollar amount of particular securities or other property.
  • Residual bequest of all or portion of estate after payment of specific amounts to other beneficiaries
  • Contingent bequest to take effect if other beneficiaries die before the donor
• A bequest can often be arranged simply with the addition of a codicil amending an existing will.

Charitable Gift Annuity

• Provides a fixed income for the lifetime(s) of one or two annuitants.
• Amount paid determined by the rates recommended by the American Council on Gift Annuities.
• The older the annuitant, the higher the level of income.
• Portion of gift and income are tax deductible.

Deferred Gift Annuity

• Offers increased income and tax benefits.
• All basic features and benefits of a gift annuity.
• Income delayed until a future date chosen by donor.
• Rate of return and tax deduction dependent on length of income delay.

Life Income Trusts

• Trust assets are funds or property contributed by donor (usually $100,000 or more).
• Flexibility in type of property that can be donated.
• Real estate and municipal bonds may be used.
• Provides a fixed amount of income. (Charitable Remainder Annuity Trust)
• Provides a variable level of income. (Charitable Remainder Unitrust)

Charitable Lead Trust

• Donor provides assets for use for a limited period of time.
• Funds are invested to provide income to your institution.
• Assets returned to donor or to estate at end of designated period.
• Can fulfill a pledge while reducing estate and gift taxes that might otherwise be due on assets given outright to heirs.

Wealth Replacement Trust

• Protects inheritance interests of heirs.
• Contributes assets to your organization either outright or through planned giving vehicles.
• Using resulting tax savings, donor purchases a life insurance policy with heirs as beneficiaries.

Life Insurance

• Make your organization sole owner and beneficiary of paid-up policy.
• Receive income tax deduction for the cash surrender value of policy.
• If policy not fully paid, continue to pay premiums.
• Receive tax deduction for annual premium amounts.

Pooled Income Fund

• Operates much like a mutual fund.
• Contributions pooled and managed by investment advisors.
• Income paid to donor and second person, if desired, until beneficiaries are deceased.
• Income fluctuates based on earnings of fund.
• Immediate tax deduction for portion of gift.
• Avoids capital gains tax if appreciated securities are given.
• Gifts to Pooled Income Fund are irrevocable.