Donors may bequeath a fixed percentage of their estate, a specific amount in
dollars, articles of property, or the remainder of an estate after other
provision of the will have been satisfied. Other types of bequests may involve
the establishment of a trust or annuity that pays income to a survivor during a
designated period of time.
In a Charitable Remainder Trust
the donor makes a gift in trust for the
current benefit of an individual, sometimes the donor, with the remainder of the
assets ultimately going to the charity. The trust pays the beneficiary an
income, either for life or a period of time. Trusts often provide current
income tax savings, capital gains tax savings, and frequently save estate
taxes. The donor receives payments based on a fixed percentage of the fair
market value of the trust assets valued each year.
In a Charitable Remainder Annuity Trust the donor makes an irrevocable
gift in trust and provides for the trustees to pay them a fixed dollar amount
each year for their lifetime or a period of years. At the time the trust is
established, the donor determines the desired fixed dollar amount of payment and
this amount cannot vary. Charitable remainder annuity trusts enable donors who
own appreciated low yield assets to make a gift and increase their return for
Donors may make gifts of insurance policies to a charity or nonprofit
organization and receive a charitable contribution deduction for the value of
the policy. The policy's value is a charitable contribution in the year of
transfer, and the donor removes the proceeds from his estate for federal tax
Retirement plans and Individual Retirement Accounts (IRAs) are subject to both
income tax and estate taxes and may carry extremely high tax costs. Donors may
mitigate some of the tax burdens by naming a charitable organization as the
beneficiary of the plan or IRA.
Other Planned Gifts
Charitable gift annuities, deferred annuities, gifts of cash, securities or
personal property are other planned gift vehicles donors may wish to consider.
For additional information or referral to financial or legal professionals,
contact Craig Fowler, Executive Director at 800-243-9482 ext.5201.