Legacy Giving:  Gifts of Significance

 

     Quite often people may say, "I only wish there were some way I could make a charitable planned gift that really made a difference."  That is the most common sentiment and feelings of many of us.  The truth is that there IS a way indeed.  In fact, several ways to make a gift of surprising significance to Allen CDC. 

 

GIFTS BY WILL OR LIVING TRUST

 

A bequest is the most traditional way to provide significant help for Allen CDC.  With a gift through your will or living trust, you retain full use of your gift property during your life.  Your bequest can be dollar amount, or a percentage of your estate.  You also can leave specific assets, or the remainder of your estate after other bequests are satisfied.

 

Types of Bequests:

 

• Specific (Cash) Bequest:

 

This the most popular type of bequest.  You may designate that Allen CDCl receives a specific dollar amount.

 

• Bequest of property:

 

Allen CDC receives specific assets such as securities, an interest in real estate (such as a residence), or tangible personal property (e.g. works of art and antiques).

 

• Residuary bequest:

 

Allen CDC receives all or a percentage of the remainder of the estate after the payment of any specific bequests and all estate related expenses.

 

• Testamentary trust:

 

The trust provides one or more heirs with income for life, after which the assets pass to Allen CDC.

 

• Retirement Plan:

 

Allen CDC is designated as a beneficiary of the remainder of your IRA, Keogh, Tax-Sheltered annuity, qualified pension or profit sharing plan.

 

• Contingent bequest:

 

Allen CDC is given a bequest only in the event of the death of other beneficiaries.

 

 

Tax Benefits:

 

A bequest is deductible for federal estate tax purposes, and there is no limit on the amount of the estate tax charitable deduction.  In addition, bequests generally are not subject to state inheritance or estate taxes.  In a large estate, the savings can be more than half the value of the bequest to Allen CDC.  Please consult a tax professional who can provide advice specific to your situation.

 

 

 

How to Make a Bequest:

 

A bequest to Allen CDC can be made by creating a New Will, adding a codicil to your existing Will, or including Allen CDC in your revocable trust.

 

 

Pooled Income Fund:

 

The Pooled Income Fund is an investment tool that combines the current gifts of multiple donors and manages them collectively like a charitable mutual fund.  You irrevocably give cash or securities to Allen CDC Endowment fund, which in turn agrees to pay you a variable income for the REST OF YOUR LIFE!  The Endowment Fund administers the pooled income fund for the benefit of Allen CDC.

 

Each quarter when the income from the pooled income fund is distributed, you receive your proportionate share of the earnings.  If you wish, you can also name a survivor to receive a life income.  When the income beneficiary or surviving income beneficiary is deceased, the Endowment Fund will receive your share from the pooled income fund and use the proceeds to support the designation of your choice.  The investment strategy of the Endowment Pooled Income Fund is to earn as high an income as is reasonable and safe while maintaining the value of your original gift.  The minimum amount required to initially participate in the Endowment Pooled Income Fund is $5,000.00.  Future additional contributions to the Fund are negotiable.

 

 

Benefits:

 

Ability to provide a lifetime stream of income for yourself and other members of your family (beneficiaries); Avoidance of Capital Gains Tax; Estate Tax and probate savings; and variable payout rates that offer opportunities to keep up with inflation.

 

 

Endowed Funds:

 

The Allen CDC operating budget allows us to function, but it is our endowed funds that allow us to enhance our community outreach and economic development projects.

 

An endowment is simply the time-honored method of allocating certain gifts, whether they are current or future to an investment portfolio.  The Endowed Fund is invested to earn income each year, and as the principle grows, so does the income available to allocate to a specific program/project.  The income growth of the fund is to support programs, but the principle always remains invested in order to perpetuate the fund.  When you make a gift to create an Endowed Fund, it can either be outright or deferred through use of a bequest in a will, trust or a charitable life income plan.  However you choose, your gift can turn into a legacy of annual giving.

 

 

Gift Annuities:

 

In general terms, a charitable gift annuity is part gift and part investment.  When you make a contribution to establish an annuity, you are entitled to an immediate federal income tax charitable deduction based on the size of you contribution and the age(s)

of the income beneficiary(\(\(ies).  You may designate the eventual purpose of your gift to the Endowment Fund of Allen CDC.

 

For example:  a gift annuity is established with a contribution of cash or securities.  Real or tangible property may be used in some instance.  The minimum contribution required to establish an annuity is $10,000.  Income beneficiaries be at least 40 years old.

 

 

Gifts of New or Existing Whole-Life Insurance Policies:  (Cash Accumlating):

 

Life insurance could be an important and significant role in you Legacy Giving to Allen CDC.  Allen CDC is named as the sole beneficiary and owner of the life insurance policy.  Your monthly or annual premium payments will qualify for a charitable deduction in the year you gift for the premium is received.

 

Paid-up existing life insurance policies are also immediately eligible for a charitable tax deduction on the computed current value of the policy in the tax year the Endowment Fund is named owner and beneficiary.

 

However, the important primary need is to protect your family and those concerns must come first in planning their future financial security. 

 

For example:  You can keep ownership of your policy even though the Endowment Fund is named beneficiary; or create a trust to receive the policy proceeds.  The funds are then invested for a family member's support after your lifetime.  When the person dies, the trust remainder can be paid to the Endowment Fund.  These optional plans will not entitle you to an income tax deduction, but they will satisfy your desire to use the policies for personal and family responsibilities as long as required and then provide a future Legacy Gift to Allen CDC Endowment Fund.