Planned giving is a thoughtful way to support our mission. Win-win for everyone.
What is a charitable gift annuity?
It involves a contract between a donor and a charity, whereby the donor transfers cash or property to Friends of Citrus and the Nature Coast in exchange for a partial tax deduction and a lifetime stream of annual income from the charity. When the donor becomes deceased then Friends of Citrus and the Nature Coast keeps the gift.
- You can make a gift that costs nothing during your lifetime.
- You can give stock and realize larger tax savings.
- You can get a monthly paycheck for life in return for your gift.
- You can donate your house, continue to live there, and get a tax break all at the same time.
You are urged to seek the advice of your tax advisor, attorney, and/or financial planner to make certain a contemplated gift fits well into your overall circumstances and planning.
How do I include Friends of Citrus and the Nature Coast in my will or living trust?
The most common way people remember Friends of Citrus and the Nature Coast in a will or living trust is through a charitable bequest. You do not have to rewrite your current documents. You simply add an amendment, called a codicil, to your will or living trust. Here is some suggested language you can have your attorney review:
“I give and bequeath Friends of Citrus and the Nature Coast tax identification number _________________, located in (City), (State), $_________” (or state a percentage of your estate, or describe real or personal property, including exact location.).
Of all the gifts you can make, a bequest may be the most meaningful. You can remember loved ones in special ways, perpetuate your values, and help Friends of Citrus and the Nature Coast. Your bequest is entirely under your control during life and becomes irrevocable only at death. A bequest can be a gift of real property if the donor intention is to dispose of real property is clearly demonstrated in the will.
There are different types of bequests.
Charitable Lead Trusts
A donor may choose to make an irrevocable gift through with their assets to Friends of Citrus and the Nature Coast, while providing an inheritance to children. A charitable lead trust is a gift of income to us, and is the mirror image of a charitable remainder trust. The initial or “lead” interest is for the benefit of Friends of Citrus and the Nature Coast.
You transfer the assets to a lead trust, which distributes income to Friends of Citrus and the Nature Coast for a term of years. At the end of the term, the trust distributes the assets, usually to children or grandchildren. Income received by Friends of Citrus and the Nature Coast from the trust is used for the purposes you specify. The lead trust is generally a lifetime gift; however, you can establish a testamentary lead trust (at death) that would provide similar benefits to your estate, as you would enjoy during your lifetime.
This trust is a specialized estate planning tool. By establishing a charitable lead trust, you are in effect, “lending” the assets to Friends of Citrus and the Nature Coast for the term of the trust. It is especially valuable if you have substantial estate and gift tax liabilities because it allows you to achieve several goals through one gift:
- The ability to make a substantial gift to Friends of Citrus and the Nature Coast
- Enjoyment of tax savings
- Transfer assets to subsequent generations with reduced or eliminated estate, inheritance and gift taxes.
Of all the charitable gift options available, this trust is among the most complex and can be a very powerful tool in gift and estate tax planning. There are many issues to consider – both legal and personal – when considering the establishment of a charitable lead trust. In the end, you may find that such a trust represents one of the best ways to help Friends of Citrus and the Nature Coast while planning a deferred transfer of assets to children.
These gifts are a valuable part of the planned giving program at Friends of Citrus and the Nature Coast. We encourage donors to consider one of two ways that outright gifts of life insurance may be used:
- The transfer to Friends of Citrus and the Nature Coast of an older policy that the donor no longer needs. Friends of Citrus and the Nature Coast should be named as both beneficiary and irrevocable owner of the insurance policy before it can be deemed a charitable gift. Upon receipt, the life insurance gift will be valued at its interpolated terminal reserve value or cash surrender value.
- The transfer of funds to purchase a policy on the life of the donor. If the donor contributes future premium payments, Friends of Citrus and the Nature Coast will include the entire amount of the additional premium payment as a gift in the year that it is made. If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, we may choose to:
- Continue to pay the premiums
- Convert the policy to paid up insurance
- Surrender the policy for its current cash value
Such designations shall not be recorded as gifts until such time as the gift is irrevocable.
While the life insurance policy will identify Friends of Citrus and the Nature Coast as the beneficiary, we will work with the donor to clarify the purpose of the gift, whether it is for endowment (existing or new), specific program or for unrestricted use by attachment of a memorandum, letter or endowment agreement.
After a thorough review, Friends of Citrus and the Nature Coast will consider gifts of real property; both improved and unimproved (e.g., detached single-family residences, condominiums, apartment buildings, rental property, commercial property, farms, acreage, etc.), including gifts subject to a retained life estate.
Friends of Citrus and the Nature Coast may also require an initial environmental review of the property to ensure that the property has no damage. Questions about the property include:
Is it useful for the purposes of Friends of Citrus and the Nature Coast?
Is it marketable?
- Are there any restrictions, reservations, easements or other limitations?
- Are there carrying costs, e.g., insurance, property taxes, mortgages, or notes?
- Does the environmental audit reflect that it is not damaged?
In the event that the initial inspection reveals a potential problem, Friends of Citrus and the Nature Coast will retain a qualified inspection firm to conduct an environmental audit; the donor typically assumes the cost of the audit. Upon completion, Friends of Citrus and the Nature Coast works with the donor and advisor in completing a Gift Acceptance Form.
Real estate gifts are complex in nature and often present certain liability issues. However real estate is also one of the most commonly owned assets. Sometimes it is not appropriate because it could create problems or divert the focus of the mission of Friends of Citrus and the Nature Coast.
Retirement Plans and IRAs
Friends of Citrus and the Nature Coast beneficiary of their retirement plans and IRAs. Using the standard designation form that includes the participant’s name and social security number, the participant should direct the primary beneficiary as Friends of Citrus and the Nature Coast. For example, the person could include this statement:
At my death, the balance in full shall be distributed in a lump sum to Friends of Citrus and the Nature Coast . This distribution will avoid both estate and income taxes.