Planned giving is a way to help sustain Trinity Church into the future. A planned gift is often described as any gift made with the involvement of another person — philanthropy. For instance, a bequest is made through a will and real estate is given through a deed prepared by an attorney; a gift of stock is made with the help of a broker, mutual fund, transfer agent, etc. Gifts can be either deferred or current. This means you can actually make the gift today or in the future. A bequest is an example of a deferred gift and a gift of securities toward your annual pledge is an example of a current gift.
Specific examples of assets that can make up a planned gift include: Check or Cash, Appreciated Securities, Tangible Personal Property, Real Estate, Life Insurance, Retirement Funds and Assets. There are a number of ways to give to Trinity Church including by Wills, Life Income Gifts, Charitable Remainder Trusts, Charitable Lead Trusts, Life Insurance and Retirement Plans.
Brief explanations of each type of gift are given below. You should consult a qualified financial planner and a qualified attorney before completing any of these options.
Wills
A gift through your Will can be made in the following ways:
- Specific Bequest: Your Church receives a specific dollar amount, a specific piece of property, or a stated percentage of the estate. This is one of the most popular forms of bequests.
- Residuary Bequest: The Church will receive all or a stated percentage of an estate after distribution of specific bequests and payment of debts, taxes, and expenses.
- Contingent Bequest: The Church will receive part or all of the estate under certain specified circumstances.
- Trust Established Under a Will: A trust may be established that provides for both the Church and other beneficiaries.
Life Income Gifts
A donor may make a gift to the Church and receive direct financial benefits. The benefits include an income for life to the donor and/or the donor’s spouse and a charitable income tax deduction, in addition to the good feeling that comes from making a gift. There are several forms of the gifts. They can provide you with an immediate income of a variable or fixed rate, or you may want a gift that will give you a fixed rate of return some time in the future. This last form is especially useful as a retirement planning device.
Charitable Remainder Trust
A charitable remainder trust provides a donor with a lifetime income and a charitable income tax deduction. The donor selects the payout rate, usually between 5% and 7%. The higher the payout rate, the lower the charitable income tax deduction. This gives the donor, and perhaps the donor’s spouse, an income every year for life. If the donor funds the trust with appreciated securities, the donor will avoid capital gains taxes. Donors may choose from two types of charitable remainder trusts: the annuity trust and the unitrust. The annuity trust pays a fixed, guaranteed dollar amount regardless of the trust’s investment performance. The unitrust pays the donor a predetermined percentage of the fair market value of the trust’s assets as revalued annually.
Lead Trust
A lead trust is the opposite of a charitable remainder trust. The “lead” income is paid first to your Church, and after a number of years (based on a term or a lifetime) the remainder is returned either to the grantor (a grantor lead trust) or to someone other than the grantor, such as the grantor’s beneficiaries (a non-grantor lead trust). It is an extremely tax efficient way of passing assets to future generations while, at the same time, making a large donation to the church. The church is given a stream of dependable annual income to carry out its mission. The donor may be able to pass the asset to heirs at a very low tax cost.
Life Insurance
The need for insurance coverage usually lessens as we age. By that time, insurance has served its original purpose of protecting our families, and it can be used for other purposes. There are two types of insurance: Term insurance protects us for a stated term, usually one year. Whole life buys the policyholder a death benefit and will also pay the holder the cash value of the policy if he/she terminates the policy before death. A life insurance policy can be given in an outright gift. The donor gives-up all rights of ownership in the policy and thereby receives an income tax deduction. A donor can also name a charity as a total or partial beneficiary of the policy, continue to maintain the policy, and receive a charitable tax deduction for premiums he or she makes to keep the policy in force. You have to change the beneficiary form.
Retirement Plans
These plans include IRAs, Section 401(k) and 403(b) Plans, Qualified Pension Plans, and Qualified Profit-Sharing Plans. You can transfer all or part of these assets to a charity. These options include an outright gift, designation of a beneficiary, bequest, and transfer to a charitable remainder trust. The last three options are the most frequently used. An outright gift subjects the funds to certain statutory limitations of charitable tax deductions.
Again, you should consult a qualified financial planner and a qualified attorney before completing any of these options.