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Charitable
Gift Annuity
When the donor transfers a gift of cash or property, the charity executes an
annuity agreement promising to pay the donor (or their designee) an annuity
for life. The amount of each annuity payment is based upon the value of the
property transferred and the annuity rate.
Benefits:
- This is a simple way for a donor to
make a gift and receive a guaranteed
annual income for life;
- The contribution is not included in
the donor's gross estate and qualifies
for gift tax annual exclusion;
- The gift creates an immediate charitable
income tax deduction for the donor of
the value of the donation minus the present
value of the annuity payments.
Deferred Payment
Gift Annuity
When the donor gives cash or securities, an annuity can be paid at a later
date. This is particularly beneficial to younger donors who do not presently
need significant income from the gift.
Benefits:
- A higher payout when the payments start;
- A larger income tax deduction the year
the annuity is established.
Charitable
Remainder Trust
When the estate owner retains the right to the income, but transfers his or
her rights in the remainder to a trust, it is called a charitable remainder
trust. It may be either an annuity trust (pays a fixed amount of the initial
fair market value of the assets) or a unitrust (pays a percentage of the assets
valued annually. Additional contributions may be made).
Benefits:
- A simple way for a donor to make a
gift while maintaining personal income
deferring a gift to another non-charitable
beneficiary;
- Creates an immediate charitable income
tax deduction for the value of the remainder
interest passing to the charity at the
end of the trust's term;
- The contribution is usually not included
in the donor's estate;
- The trustee assumes fiduciary responsibilities
over the contributed property;
- Highly appreciated securities can be
sold without incurring capital gains
tax which produces higher immediate income
to the donor.
Naming ACA
as the Beneficiary of Life Insurance
A donor may name a charity as sole or partial beneficiary of life insurance
policies owned by the donor. The death benefit paid to the charity becomes
deductible from estate and inheritance taxes.
Benefits:
- An easy way for a donor to make a gift
of an existing or new policy;
- The amount of the death benefit contributed
to the charity is deductible from estate
and inheritance taxes at death
Transfer on
Death Account
This type of account is beneficial when a donor needs to retain his or her
finances for the donor's lifetime but wishes to donate a gift upon death. As
with insurance policies, during your life you will retain all ownership, interests,
and dividends. Upon your death, remaining funds are passed to the charity,
avoiding the typical delays of probate. There being no current gift to the
charity means there is no immediate income tax deduction, however, when the
assets transfer to the charity the gift is then deductible for estate and inheritance
tax purposes.
Benefits:
- The donor retains ownership and access
to the donor's assets;
- Probate is generally avoided;
- Inheritance and estate tax deductions
will apply.
Distribution
Instructions of Will or "Living" Trust
When a donor wants to pass property to beneficiaries upon his/her death, the
ownership is transferred in trust to a trustee, who will ensure the terms of
the trust are executed correctly. This allows the donor to maintain control
of and access to the donor's property should the need arise.
Benefits:
- Assets are legally owned by the trust
and therefore not subject to probate
and pass to your beneficiaries in a timely
manner with less expense;
- Funds donated are deductible for estate
tax purposes but not income tax purposes.
Gift of Life
Insurance Policy--Income Tax Deduction
Donors may make an irrevocable assignment of their life insurance policy to
a charity that entitles them to an immediate income tax deduction for either
the policy's fair market value or the net premiums paid, whichever is less.
Contributions to pay subsequent premiums will result in additional income tax
deductions.
Benefits:
- Inheritance and estate tax deductions
will apply to both the gift and subsequent
premiums paid
Memorial Gifts
A donor may decide to give a gift to ACA in honor of a special person or camp.
Memorial gifts are dedicated to support the mission of ACA such as by funding
professional development or public relations initiatives. Memorial gifts
of less than $10,000 go to the Kruger endowment fund. |
