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Explore your planned giving options. “Planned giving” is a term commonly used to describe a wide variety of giving vehicles that allow you to give to charity during your lifetime and/or after your death, while meeting your current income needs and providing for your heirs. Planned giving is typically done in conjunction with estate planning, and is a viable option for donors of all income levels. Planned giving is attractive for many reasons. It may allow you to make larger gifts than you otherwise could out of your current assets. Depending on how a planned gift is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes. Planned gifts can be used to benefit a specific nonprofit organization, to establish a fund at a community foundation, to create a supporting organization, or to start a private foundation. The most common planned giving vehicles are gift annuities, charitable remainder trusts, charitable lead trusts, charitable bequests and beneficiary designations. A charitable gift annuity provides you with lifetime income. To establish a gift annuity, you contribute funds or assets to a nonprofit organization, and that nonprofit in turn makes fixed annuity payments to you from its general assets for the rest of your life. You receive an immediate income tax deduction for a portion of the gift, and a portion of each annuity payment is treated as a tax-free return on the investment. The portion of the gift not used for payments benefits the nonprofit organization. A charitable remainder trust allows you and/or other designated beneficiaries to receive income for your lifetime(s), or for a period of years not to exceed 20. At the end of that time, the balance of the trust is transferred to a charity that you have selected. You can take a charitable deduction for a portion of the gift you make to the trust in the year the trust is formed. In some cases, additional funds may be added in later years. A charitable lead trust allows you to designate a charity to receive a regular, fixed amount from a trust for a specified time period or the lifetime of a designated person. At the end of that time period, the remainder of the trust passes to your designated heirs or other non-charitable beneficiaries. A charitable bequest is anything you give or leave to charity from your estate through a will or revocable inter vivos (“living”) trust. An “estate” is any property, money or personal belongings that you may have at the time of your death. Most people leave an estate when they die, even though they may not have a great deal of wealth. Even an individual with a small estate can arrange to leave a charitable bequest. Bequests often appeal to people who want to benefit a charitable organization but aren’t certain how much of their assets they’ll need for themselves during their lifetimes. You can arrange to bequeath a gift from your estate in several ways. You can set aside a specific dollar amount, leave a percentage of your estate or leave any assets left over after your family has been provided for. Consult a professional advisor for details. Through beneficiary designation of your life insurance or retirement assets, you can enjoy certain tax advantages and some flexibility in your charitable giving. The designated charity will receive the specified assets upon your death, and you will have the option of changing the eventual recipient throughout your life.
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