Creating a Legacy of Watershed Conservation and Environmental Education through Estate Planning
You may stop, on occasion, to consider the impact your life has on the people around you. Many people can look at their family and friends knowing they have had a positive influence. Still they yearn to do something more, something deeper for mankind; something positive that will survive the challenge of time. Achieving that impact is possible by including charitable gifts in your estate plans.
Here are some ideas with links to more information on how you can support watershed conservation and programs at BRC:
A person or couple can name BRC as a beneficiary in their estate documents, regardless whether they use a will or living trust. This is one of the most meaningful ways a charitable organization can be supported by those who have been touched in some way by the work BRC is doing. And, it’s easy to do! You can call our offices and one of our staff will be happy to provide language you can give your attorney as you update, or complete, your estate plan.
Gifts of Stock
If you have publicly traded stock that has appreciated in value, you can avoid capital gains tax when you make a donation of that stock to BRC. If you happen to like that particular stock, you can then use your available cash to repurchase the stock at a new, higher cost basis.
There are many types of retirement plans. For some, the value drops to zero when the beneficiary dies, but others such as 401(k) plans and IRAs have a residual value that becomes part of the estate of the deceased.
However, the IRS doesn’t forget that those very same retirement plans have never been subject to tax! So, if a person passes away while holding the retirement plan in their estate, income tax to your heirs AND possibly estate taxes will be due.
To avoid this scenario, it’s often advisable for people simply to name their favorite charitable organization(s) as the remainder beneficiary of their retirement plan. This can be easily done by calling the retirement plan administrator and filling out a new beneficiary designation form. Charitable organizations are not subject to estate or income tax, so the full value of the retirement plan can become a gift.
Gifts that provide Income Back to You
Charitable Gift Annuities
A gift annuity offers many advantages. First, and foremost, the payout rates for gift annuities are generally quite attractive to people in their 70s, 80s and 90s. The rates typically range from 6-9%. If a person, or couple, is currently experiencing a low return on their CDs, money market accounts, treasury notes, or bond funds, a gift annuity can be a nice alternative. The payout rates are determined by a person’s age, and once established are fixed for life. Second, the donor receives a generous income tax deduction for the year in which they create a gift annuity. Often the tax deduction is 20-50% of the amount that they placed into the annuity.
And finally, depending upon how the gift annuity is funded, the donor can enjoy a significant portion of the income they receive from a gift annuity on a tax-free basis. There are many forms of gift annuities. Some offer an immediate payout option, while others allow the donor to fund the agreement and get an income tax deduction now, but delay the beginning of payments until some point in the future of their choosing.
Call BRC’s Development office if you are interested to learn more about gift annuities. A confidential illustration can be prepared specifically for you which will reveal what your payout rate would be, how large your income tax deduction amount would be, and what portion of your payments would be tax-free. There is no cost or obligation to inquire.
Questions for BRC:
Jim Jordan, Executive Director
610-793-1090 or firstname.lastname@example.org