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Charitable Gift Annuities
Planned Gift opportunities
The future promises to be exciting and challenging for all. Whether you are single, married, raising a family, or planning for retirement, your future and the future of those you care most about will be affected by the plans you make today.
To help you reach your personal goals, consider nine planning opportunities. These planned gift tools may help enhance your future financial well-being while providing for a meaningful charitable gift as well. The best plans balance what you strive to accomplish for yourself, your family and your charitable interest through your overall estate and financial plans. Please contact us if you have questions or would like additional information for yourself and your advisors.
Wills and Bequest
Benefiting others through your Will
Consider leaving JVMI in your Last Will and Testament. We will provide for you and your advisors the specimen wording for your will which will reflect the designations for the ministries or programs which best matches your interests and priorities. By working with us you can be assured that the gifts you make through a bequest will have an eternal significance in the lives of those we reach through our ministries. After first providing for the needs of loved ones, you may choose one of several ways to benefit charitable interests. By having your attorney revise your will or add a simple amendment, you can provide for a gift of a dollar amount, a specific property, a percentage of your estate, or what is left after remembering your loved ones. You may also wish to name one or more charitable recipients as secondary beneficiaries in case your primary beneficiaries do not survive you.
Revocable Trusts
Giving through revocable trusts
If, like many others, you have decided to minimize probate expense and delays by relying on a revocable living trust to pass all or a portion of your property to loved ones, consider adding a charitable dimension to this plan. You can direct that the termination of your revocable living trust, a portion of the assets remaining will be used for charitable purposes. Much like a charitable bequest though a will, such a gift is deductible from estate taxes that might otherwise be due, and can take effect only after loved ones have first been provided for.
Charitable Gift Annuities
Gifts that feature income that never changes
There are a number of ways to give that allow you to retain income from your property for life or for another period of time you specify. Your funds may be held separately or combined with those of others and invested for payment of a regular fixed income to you and/or someone else you name.
Such payments can be a welcome supplement to your retirement plan. Professional management of assets can be another benefit of such plans. Charitable Remainder Annuity Trusts and Charitable Gift Annuities are options you should consider in fixed income arrangements.
At the death of the income recipient(s) or at the end of the period of time you specify, funds that remain are devoted to charitable uses you determine.
The payments you receive each year are based on your age or other factors at the time you fund your gift, and the amount will not change over time. A tax deduction is allowed at the time you make your gift. The amount of the deduction depends on your age, payment percentage, and other factors. JVMI is currently offering gift annuities with a minimum contribution of $10,000 (one or two lives) for ages 50 years or older. See Charitable Gift Annuity Schedule
The Charitable Gift Annuity is an increasingly popular way to make meaningful gifts while you enjoy income and tax benefits that can help preserve or even enhance your future financial well-being.
Under the terms of a gift annuity, you make a charitable gift of cash, publicly traded stock, bond or mutual fund. You and/or others, if you desire, then receive generous fixed payments for life. The frequency and amount of payments are determined at the time the gift annuity is funded. The payments will never change and are designed to continue regardless of how long you and/or other recipients live. You are entitled to an income tax deduction for the year of your gift, with carry over for up to six tax years until you have utilized the entire deduction. In addition, for a period of time, part of each payment may be received free of income tax or be taxed at capital gains tax rates that may be significantly lower than rates you pay on other income. The amount used to fund your gift annuity may also be free of gift and estate taxes. You thus enjoy income and tax benefits TODAY for a fit that you might otherwise have planned to make in the future thought your will or other long-range plans.
Charitable Remainder Trusts and Unitrusts
Gifts that feature flexible income
Other gift planning options feature income for you or others you select that can increase or decrease with the performance of the assets. At the time of your gift, you determine the payout percentage of the value of the assets each year, or whether payments will depend on the amount earned by the assets. When the value of the underlying investments increases and/or earnings are greater, more income may be received. The income can be less if the value of the assets declines and/or earnings decrease. The Charitable Remainder Unitrust is especially appropriate when the trust is funded with non-cash assets or real estate property. The Unitrusts can provide increased income from low-yielding assets; reduction or elimination of capital gain, estate, and/or gift taxes that could otherwise be due. For example, funding a Unitrust with appreciated stock which pays a 2% annual dividend to a Unitrust which pays a 6% annual income will triple the income you could receive and provide current charitable deductions for the year of the gift transfer to the Trust. In addition, diversification of investments and the potential for tax-free growth of assets are possible benefits from the Charitable Remainder Unitrust. Real Estate property when transferred to the Unitrust will provide income to the recipients once it is sold; can be funded with real estate property which once sold will provide.
Other assets may be placed in the trust over time and a tax deduction is allowed for a portion of each contribution. For many people, such gifts can also play a welcome role in retirement planning. The Unitrust may maximize the total value of an IRA a husband and wife may wish to leave to their children. Transferring the IRA to the Unitrust through a testamentary plan through the parent’s last will and testament, the Unitrust would provide protection from 78% to 82% tax which could be levied against the IRA if the parents had left the IRA directly to the children. We are available to meet with you and your tax and legal advisors to discuss the application of any of the planned gift options which are available to you.
Charitable Lead Trusts
Make a gift while providing for loved ones
People who wish to make a substantial gift over a period of years while ensuring that their property will ultimately be returned to them or their loved ones may be interested in a charitable lead trust.
The lead trust is a very flexible plan and can be one of the few ways to control exactly when an inheritance is received while reducing or eliminating taxes and probate expense that might otherwise be due on assets left to children, grandchildren, or others.
Under the terms of a charitable lead trust, assets are transferred to a trust that makes payments to one or more charitable recipients for a number of years you determine. At the end of that period, the assets are returned to you or transferred to others you name. The Charitable Lead Trust is especially useful for the family-owned business or closely held corporation when the income earned from the company is not needed for a term of years and the goal is to transfer the business to a family member(s) with little or no estate tax. In this Trust, the charity will receive the income for the term of years. At the termination of the Lead Trust, the entire value of the business as well as all of the appreciation of the business can be passed on tax effectively to family members or long time employees with no capital gains or estate tax on the increased value of the business.
Life Estate Agreements
Give your home and continue to live there
You can make a gift of a home or certain other real estate while retaining the use of the property for as long as you live. Through a life estate arrangement, you can make a gift of a personal residence or farm while retaining the security of knowing you may live there as long as you wish. This type of arrangement could simplify estate planning for families whose real estate holdings are in another state. The satisfaction of giving, as well as significant tax benefits is enjoyed now rather than later.
You continue to maintain the property, pay the taxes and even receive any income it generates. But, because you have already arranged for transfer of the property by deed, it bypasses your probate estate at death, possibly saving unnecessary expenses and delays. You may enjoy a current charitable deduction for the future gift of the real estate property for the current tax year. A life estate agreement may be set up for two lives. After the death of one family member, family member or friend named as the second life for the life estate may continue to live at the home/farm for life. Following the death of the second life, the home or farm becomes a gift to Jewish Voice.
Life Insurance
Surprising benefits from gifts of Life Insurance
The need for life insurance can change as life progresses. Children become self-sufficient, and investments may provide unexpected income and security. As a result not all life insurance coverage may still be needed for the reason it was initially purchased.
And now that federal law increasing exempts more estates from taxation, you may wish to direct that insurance purchased in the past to cover estate taxes be used for charitable purposes instead.
One way to make a significant gift is to name a charitable beneficiary to receive all or a portion of the proceeds of life insurance that is no longer needed for its original purpose. Or you may choose to make a gift of such a policy today and possibly benefit from immediate tax savings.
Another option is to transfer ownership of an existing policy on which premiums are still being paid or purchase a new policy naming a charitable beneficiary. In either case, future premiums can be tax deductible.
Retirement Plans
Creative gifts through Retirement Plans
Whether you participate in a company retirement plan or other plan you have established, such as an Individual Retirement Account (IRA), you may feel you have more funds that will be needed to provide for the future economic well-being of you and your loved ones.
In that case, it may be convenient to make a charitable gift from surplus retirement assets during lifetime or at death.
It can be gratifying to know that the funds you carefully saved over a lifetime may be given now or as a part of a prudent estate plan. As funds remaining in the plans can be subject to both income and estate taxes, it can be wise to make charitable gifts in this way and leave other assets to loved ones. Proposed federal tax law changes may make gifts of retirement plan assets even more attractive. Check with your advisors for the most current information.
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