Secrets of Giving Wisely

Charitable gift annuities (CGA) are split interest gifts that provide one or two people with fixed income for life, and afterwards benefit charity. Many seniors utilize gift annuities for retirement purposes as it provides secure lifetime payments at attractive rates. For more information, (click here), Younger individuals often utilize deferred annuities for the same reason, obtaining considerably greater payout rates by deferring any income payments until their retirement years. For more information, (click here).

When you fund a gift annuity, you can take the charitable deduction in the year you make the gift for a portion of the amount funded. A portion of the payments you receive each year may also be exempt from certain income taxes. You can even reduce your capital gains tax by using long-term appreciated securities to make your gift. For more information, (click here).

Your gift annuity can also help provide for others while creating a charitable donation to Anderson University. You may request a two-life annuity and provide lifetime fixed payments not only for yourself, but for your spouse, child or other loved one.

The charitable remainder trust (CRT) is an efficient charitable planning tool often utilized by individuals holding assets that have experienced significant appreciation like stocks, real estate, or a business. It is an irrevocable trust designed to convert such assets into a lifetime income stream without generating capital gains taxes.

When you establish a CRT, you and/or another beneficiary, such as your spouse or another family member, receive income from the trust for life or for a term of up to 20 years. In addition, you receive an immediate income tax charitable deduction for your gift. Any capital gain from the asset utilized to fund the trust is averted, and the asset is eliminated from your estate for estate tax purposes. When the trust ends, the remaining assets pass to the qualified charity or charities of your choice. More on charitable remainder trusts, (click here).

A charitable lead trust (CLT) is often described as the reverse of a charitable remainder trust because the interests going to the charitable and non-charitable beneficiaries in a CLT are the opposite of a CRT.

With a CLT, you transfer assets to the trust, which pays one or more charities an income stream for a period of time. When the period of time you specify ends, the remaining trust property returns to you or goes to other non-charitable beneficiaries, such as your spouse, children, grandchildren, or anyone else you name in the trust. The lead trust is an excellent means for transferring principal to family members at a future time and avoiding substantial estate or gift taxes while affecting this transfer. Utilizing this tool in conjunction with a family limited partnership can provide even more dramatic benefits. More on charitable lead trusts, case study audio/video presentation, (click here).

We often think of making outright gifts to charity in the form of cash - simply write a check as a means of our support. However, a significant tax advantage can be realized by making gifts of appreciated securities.

Your gift(s) of stocks, bonds, or other publicly traded securities held longer than one year entitles you to a charitable deduction for the full fair market value of the appreciated asset. In addition, you avoid the capital gains tax by transferring the securities directly to the ministry of your choice. Learn more, (click here).

Alternatively, if you would like to make the gift and avoid the capital gains tax, but need to retain some benefit during your lifetime, you can choose to create a charitable gift annuity. Here, your gift produces a worry-free lifetime income stream and a significant immediate charitable deduction, as well as ultimately benefiting Anderson University in a very meaningful way. Learn more, (click here).

There are several ways in which real estate can be gifted to benefit Anderson University. First, if you no longer need any benefit from the real estate, it can be gifted outright to Anderson University. Here, you would receive a charitable deduction for the full market value of the property and avoid capital gains tax on the appreciation of the real estate.

Alternatively, real estate could be gifted in a way that provides a benefit to you during your lifetime and ultimately benefits Anderson University. This could be accomplished through a charitable remainder trust. Typically, the property is gifted to the charitable remainder trust and then sold; the trust makes payments to you or other beneficiaries for a period of years or a lifetime, and afterward, the remainder interest goes to Anderson University. More on charitable remainder trusts, (click here).

Another way to give real estate and obtain a charitable deduction, but still retain a benefit, is through a retained life estate. With a retained life estate, you can donate your residence, vacation home, or farm to Anderson University and retain full lifetime use of the property. You will receive an immediate income tax deduction for a portion of the fair market value of your property. You will continue to be responsible for insuring and maintaining the property and for paying property taxes. More on retained life estates, (click here).

When real estate is income bearing, such as rental properties, and the ultimate objective is to transfer these properties to children without estate taxes, a charitable lead trust can accomplish this and also increase overall giving to ministries. The charitable lead trust utilized in conjunction with a family limited partnership can further enhance the overall outcome. To learn more, case study audio/video presentation, (click here).

Tax-deferred retirement plan benefits are excellent sources of retirement income, but are not always the best choice for making gifts to heirs. Consider using them to make a significant gift to Anderson University. Because retirement plan benefits are subject to both estate and income taxes, the cost of the gift to your estate is often relatively small. Learn more, (click here).

The value of an individual’s business often appreciates dramatically over time. The ultimate sale of such a business presents tremendous gifting opportunities for the owner, but must be accomplished before the sale. Thorough planning and the utilization of available charitable tools prior to the sale of these assets can be expected to provide outstanding results. Learn more, audio/video presentation, (click here).