• Estate and Planned Gifts Possibilities and Terminology

  • Wills and Bequests: Specifying in a will by bequest that funds be directed to charitable organizations is one of the easiest and most effective means to distribute assets as the donor wishes. In addition, bequests are deductible for estate -tax purposes, and the donor may specify how the gifts should be used.

  • Life Insurance: By transferring ownership of a life insurance policy to a charitable organization, the donor receives a tax deduction for the value of the policy and removes it from the value of his or her estate. Contributions to the charity to pay the premiums to maintain the policy are also deductible.

  • Real Estate: By making an outright gift of property, the donor receives an immediate tax deduction of the property's full value. The income tax deduction is limited to 30% of the donors AGI in the year of the gift with a carry forward of five years. A donor can also gift the property today but continue to occupy it under a retained life estate agreement for the remainder of his or her lifetime, though the income tax deductionwill be reduced based on actuarial factors.

  • Charitable Remainder Trusts: By deciding to establish a trust with the charitable organization as beneficiary, the donor recieves immediate tax deductions based on the age of the income beneficiary and the amount of the trust. The income beneficiary receives regular payments each year as established by the trust documents for the remainder of his or her life.

  • Charitable Lead Trust: Sometimes known as the reverse of a charitable remainder trust, this vehicle provides income annually to a charitable organization for a predetermined number of years, after which the trust assets pass to the designated beneficiaries. While complex, this type of trust can allow assets to pass to a beneficiary at today's value, limiting estate and gift tax liabilities.

  • Pooled Income Fund: This mutual-fund approach to a gift annuity combines the gifts of many donors for investment purposes. The net earnings of the funds are shared proportionately to provide income for the donors. The donor received an income tax deduction in the year of the gift and the charitable organization receives the donor's proportionate share of the fund on the death of the donor.

  • Wealth Replacement Trust: This option allows a donor to make a sizable contribution to a charitable organization today while replacing the donated assets through life insurance. Tax savings may pay for the premiums, and the trust (or beneficiaries) would own the policies, removing them from the donor's estate.