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Planned Giving
Ways for
Individuals to Give through Estate Plans
You may choose to
make donations in a variety of ways and can consider using assets
such as life insurance, property and retirement accounts as well
as cash or appreciated securities. At the same time, you can save
income taxes and estate taxes and even retain the use of the
assets or the income from them until they are no longer needed.
There are many ways to give and these can be tailored to your
personal circumstances so that your current lifestyle is not
impacted and you will be benefiting the St. Louis Church Endowment
Funds by providing support and assistance for generations to come.
This portion of the website is intended only to
provide general information about charitable gifts and
charitable-gift planning. It is not intended as SPECIFIC legal,
tax, or investment advice. please consult your attorney, tax
professional, or investment professional FOR THE MOST EFFECTIVE
MEANS OF CHARITABLE GIVING FOR YOUR SPECIFIC CIRCUMSTANCES. iF
YOU DO NOT HAVE A RELATIONSHIP WITH AN EXISTING ESTATE ATTORNEY
OR OTHER PROFESSIONAL, sT. lOUIS cHURCH eNDOWMENT fUNDS CAN
PROVIDE THE NAMES OF SEVERAL
Some of the
most commonly used giving options are listed below:
Gifts
of Appreciated Securities
Appreciated securities
are a particularly attractive method of making a lifetime gift to
Saint Louis Church Endowment Funds. Take the example of a donor
who has held a particular investment for several years with an
original cost of $5,000. The stock is currently valued at
$25,000. The donor may make an outright gift of the stock to the
Endowment Funds taking both a federal and state income tax
deduction for the full current value of the asset or $25,000.
The donor also avoids
capital gains tax on the appreciation of $20,000. This also
removes an asset from his or her estate, thereby reducing possible
estate taxes upon death.
Securities
(Fair Market Value) $25,000
Original Cost $ 5,000
Capital
Gain $20,000
Gifted
Securities $25,000
Income Tax Savings
($25,000 x apx. 40%)
($10,000)
Capital Gain Tax Avoided
($20,000 x apx. 20%) $4,000
Actual
Cost of Gift $11,000
Gifts of Life Insurance
A gift of life insurance may allow a donor to make a much more
substantial gift to Saint Louis Church Endowment Funds than he or
she ever thought possible. The process is simple. The donor
transfers an existing policy (on his or her own life) to the
Church Endowment Fund. The donor continues to pay the annual
premium, taking federal and state income tax deductions for the
value of the policy when transferred and for the annual premium
payments. A Saint Louis Church Endowment Fund is named the
beneficiary. The donor may also name more than one fund as the
beneficiary, with a percentage to each.
Upon the donor’s death
the face value of the policy, together with any accrued dividends
and interest, is paid over to the Church Endowment Fund. Through
the gift of life insurance a donor can make a substantial gift
without actually transferring current assets. In this instance
the insurance policy is not included in the individual’s estate
for estate tax purposes.
A donor may also
change a beneficiary designation providing for a generous donation
to the Church Endowment Funds. It is a simple procedure that will
ensure that the insurance policy proceeds pass to the Church
Endowment Funds in the event of the donor’s death, together with
any accrued dividends or interest. Again, a donor can make a
substantial gift without transferring assets while at the same
time reducing possible estate taxes as a result of the full
charitable deduction allowed.
Gifts of Real Estate
A donor may
have no one to leave their home to and may choose to leave it to
the St. Louis Church Endowment Funds through their will. Or they
may consider transferring the real estate to the Church Endowment
Funds today, receiving an immediate income tax deduction while
retaining a life estate for the rest of their lives. Leaving the
home to the Church Endowment Funds may also eliminate possible
estate taxes.
A donor may
also own a piece of property for which they have no future use.
This can be donated and the donor will receive a federal and state
income tax deduction equal to the value of the property while
avoiding possible estate taxes. The Church Endowment Funds will
sell the property and the proceeds will be invested to fund future
needs in accordance with the specific Fund’s mandate.
Gifts of Retirement Accounts
Many
people are unaware that their retirement plans, including IRAs,
Keoghs, 401(k) and 403(b) plans, may be subject to income,
federal, and state estate taxes when they die. These taxes can
currently consume up to 75 percent of the assets in those plans.
This tax bite could make retirement plans one of the least
desirable assets to have in your estate at death, but one of the
best vehicles for giving to St. Louis Church Endowment Funds.
A donor
wishing to utilize a retirement plan as a gifting vehicle could
either make an outright gift of the account or name the Endowment
Funds as a beneficiary, in which case, the remaining balances in
the account will transferred at death.
Gifts of
retirement plans can avoid the income tax and possible estate tax
liabilities associated with these assets. This can provide the
donor with substantial tax savings and the knowledge that one is
leaving a lasting legacy for our Parish and future generations.
Bequests Under a Will
A donor may decide to remember our Church Endowment Funds through
their will by setting aside a stated amount, a specific asset
(i.e., securities, property) or a percentage of his or her
estate. Upon the donor’s death, the funds pass directly to Saint
Louis Church Endowment Funds. During the donor’s lifetime, the
terms of the gift can be changed at any time by amendment to one’s
will. The donor’s estate receives a full charitable deduction for
the value of the bequest thereby reducing any federal and state
estate taxes that may be assessed.
Examples of
bequests included;
I give and
bequeath the sum of dollars, or ( %)
of my estate,
or
securities, to Saint Louis
Church Endowment Funds, for its General Fund or to be added to
the following designated fund or funds equally or in the
following percentages
% Life
Long Faith Formation Fund
%
Joseph E. Bagale Social Outreach Fund
% Upper room Fund
% General Fund
or
…to be used
as determined by the Finance Committee or duly appointed officer
of the parish.
Gift Annuity Program
The Gift Annuity Program allows a
donor to make a charitable contribution while still retaining
income for his or her life and for the life of a second individual
(e.g., a spouse). The donor receives a charitable deduction for
part of the current value of the gift. Income is paid out to the
donor on a quarterly basis.
The program allows
individuals to make gifts directly to the Church Endowment Funds.
However, the program is also flexible enough to allow donors to
set up an annuity benefiting the Church Endowment Fund.
In any event, the Gift
Annuity Program is an excellent vehicle for donors who wish to
make a significant contribution, receive a charitable deduction,
and retain income for life.
A charitable gift
annuity may also be created in a will or other testamentary
arrangement for the benefit of a loved one. Under the plan, you
can create an annuity that will take effect at death and provide
income for the person of your choosing. You’ll also enjoy knowing
that a charitable cause will ultimately benefit.
In addition to the
other benefits of a gift annuity, you are entitled to a federal
and state income tax deduction for the amount that will go for
charitable use.
Charitable Remainder Trust
A charitable remainder
trust is an attractive method for a donor to make a gift to Saint
Louis Church Endowment Funds while still retaining a lifetime
income. The donor transfers assets to a trust (cash or
appreciated securities, for example) and receives a minimum
guaranteed income rate of at least 5% per year. The actual return
rate, be it 5%, 6%, or more, is determined upon the establishment
of the trust. Income is normally paid out on a quarterly basis
for the donor’s lifetime and for that of a second individual (a
spouse, for example) if desired.
At the time of the
gift, the donor receives both a Federal and a New York State
income tax deduction for the value of the trust less the lifetime
interest of the donor as computed by Internal Revenue Service
tables. This can result in considerable income tax savings. Thus
the donor not only is guaranteed a life income, but also benefits
from a reduction in income taxes.
As in the other types
of charitable gifts, once again an asset is removed from the
donor’s estate, thereby reducing possible estate taxes.
Example: Couple
age 65
Securities
(Fair Market Value) $100,000
Original
Cost $35,000
Return Rate 5%
Gifted
Securities $100,000
Income Tax Savings ($14,918)
Capital Gain Tax Avoided ($20,000)
Actual Cost of
Gift $65,082
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