As a professional advisor, you play a significant role in our planned giving program.

Planned gifts allow for your client to leave a lasting legacy by providing a significant gift to the community.  With your guidance and support from CFBC, your client may choose from several planned giving options:


Appreciated Securities

 

Appreciated securities, when donated, allow donors to avoid the capital gains tax while providing an accompanying income tax deduction for the current fair-market value of the gift.

How it Works

  • Appreciated stocks, bonds or mutual funds must be owned for over a year before being gifted to the foundation.
  • To qualify for tax benefits, the stock, bond or mutual fund itself must be donated, not the proceeds from the sale of the stock, bond or mutual fund.
  • The foundation then sells the securities and adds the revenue to the donor’s choice of fund.  

Benefits

  • An immediate tax deduction for the fair-market value of the gift
  • No capital gains tax charged when stock is sold
  • Donors may choose the use for the gift
  • Donors are able to give a more sizable gift due to the tax-exemptions

 

Bequests

 

Bequests allow donors to leave a lasting legacy through naming the Community Foundation as a beneficiary.  Bequests are the most common form of planned giving.

How it Works

  • Designate the Community Foundation as a beneficiary in your will
  • Specify a percentage or fixed amount of your estate that you wish to donate
  • Donors are able to do one of three things: establish a new fund, name an existing fund as a beneficiary or gift unrestricted funds to the Community Foundation

Benefits

  • Simple to create
  • Provides for the family first before given to the foundation
  • Donors control bequest during their lifetime
  • The gift will qualify for a significant deduction from estate taxes

 

Charitable Gift Annuity

 

Charitable gift annuities let donors make a substantial gift while retaining the right to a lifetime income.  The rate of income paid is dependent on the age of the donor. The older the donor, the higher the annuity rate and vice versa.  When the income is no longer needed, the principal rolls over to the foundation to support the philanthropic cause donors have selected.

How it Works

  • Transfer gifts of cash or securities to the Community Foundation
  • The Community Foundation pays the donor and one named beneficiary a fixed income for life
  • Donors may receive a fixed income immediately or may defer collection of income until later in life

Benefits

  • Simple to establish
  • Generate income while contributing to philanthropic causes
  • Donors are able to reduce and defer capital gains tax with the possibility of reducing probate costs and estate taxes
  • Immediate tax deduction for the philanthropic share of the donor’s gift

 

Charitable Lead Trust

 

A charitable lead trust names the community foundation as the beneficiary receiving an annual payment for a specified number of years, typically no longer than 20 years.  When the trust ends, the principal is returned to donors or others they have designated.

How it Works

  • The donor specifies a number of years for the Community Foundation to be a beneficiary of the Charitable Lead Trust
  • An annual stream of income is given to the Community Foundation for the term of the trust
  • At the end of the term, the trust is transferred back to the donors or their heirs

Benefits

  • Transfer of the trust from the Community Foundation to the donor or donor’s heir can be done at a lower cost
  • The Charitable Lead Trust allows the donors to make a significant contribution to the foundation while insuring their heirs will be provided for in the future.

The gift results in significant income and estate tax deduction that may prove useful in a year in which a donor may have a large amount of taxable income.

 

Charitable Remainder Trust

 

A charitable remainder trust allow donors, or someone they designate, to receive an income for their lifetime by transferring assets to a trust.  When the trust ends, the remainder is placed in a permanent fund at the Community Foundation in the donor’s name, with the annual distributions made in accordance with their wishes.  There are two types of Charitable Remainder trust: Charitable Remainder Annuity Trust (fixed payout) and Charitable Remainder Unitrust (variable payout).

How it Works

  • Transfer cash or property to the foundation.
  • Receive an income for your lifetime or a fixed term of years.
  • After the donor’s passing, the remainder of the trust is left to Community Foundation.
  • The trust may be established during the donor’s lifetime or created by the donor’s will.

Benefits

  • Generate spendable income while contributing to philanthropic causes.
  • Assets may sell without incurring capital gains tax.
  • Donor’s experience an immediate deduction in their income and estate tax.

 

Life Estate

 

Life estate is given by donors to the Community Foundation to use for the public good qualifying the gift for a significant tax deduction.  Donors reserve the right to live on the property during their lifetime.

How it Works

  • Transfer ownership of the property to the Community Foundation and reserve the right to live on the property.
  • The Community Foundation may sell the property after the donor’s passing.  Revenues from the sale will be reinvested in the foundation to support the causes specified by the donor.

Benefits

  • Provides an immediate tax deduction and removes a high-value asset from the estate.
  • Donors’ heir do not have the burden of selling the property.
  • Donors receive significant tax savings through avoiding capital gains tax and reducing income tax for the present value of the remainder interest of the property.

 

Life Insurance

 

Life insurance permits donors to name the Community Foundation as the beneficiary of a new or existing policy, allowing your clients an immediate tax deduction which usually approximates the cash surrender value of the policy. Insurance premiums paid after the transfer of the policy can be deductible as a charitable contribution.

How it Works

  • Name the Community Foundation as the owner and beneficiary of the policy
  • Donors may continue to pay premiums, if necessary, to the foundation. The foundation in turn pays the premium to the insurance company
  • If donors do not wish to name the Community Foundation as the owner of the policy, donors may retain ownership while naming the Community Foundation as the sole or secondary beneficiary.

Benefits

  • Donors are able to make a large gift with little cost
  • Life insurance gifts qualify for an income tax deduction for the cash value and/or premiums paid
  • Reduction in estate tax
  • Donors may specify what the funds are designated for
  • The donor’s family is still cared for first if the foundation is named a contingent beneficiary if the donor keeps ownership of the policy

 

Retirement Plan

 

Retirement plan donations allow individuals to give part of their IRA to the Community Foundation, qualifying their estate for a charitable deduction.  Donors do not lose access to their retirement plan during their lifetime.

How it Works

  • Name the Community Foundation as beneficiary of your IRA, 401(k) or other qualified retirement plan.
  • The balance of the donor’s retirement plan will transfer to the Community Foundation after the donor’s passing.
  • Donors may also choose to take advantage of the IRA Charitable Rollover provision, which allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their IRA without treating the distribution as taxable income.

Benefits

  • Simple to establish
  • Donors are able to withdraw income for a lifetime
  • If a donor’s family’s needs change during their lifetime, donors may change the beneficiary of their retirement plan
  • Estate qualifies for a charitable deduction on estate taxes
  • If the retirement plan is passed directly from the owner to the foundation, income and estate taxes are avoided
  • Donors maximize the value of their assets

How can an estate gift make a difference?