Planned Giving for Your Clients

Bequests

A charitable bequest is one of the easiest and most flexible ways your clients can leave a gift to The Community Foundation. Your clients just designate The Community Foundation as the beneficiary of assets by will or trust, or as a beneficiary designation on retirement account, life insurance policy, or bank accounts. A bequest can be a gift of a percentage, a specific dollar amount, or the balance or residue of your client’s estate.

The Community Foundation can provide confidential gift illustrations tailored to your client’s situation and draft language for many types of gifts.

SAMPLE BEQUEST LANGUAGE

Charitable Gift Annuities (CGA)

A CGA is simple contract between The Community Foundation and your client. In exchange for a gift of cash or marketable securities, The Community Foundation agrees to provide a stream of income to your client or his/her designated beneficiary for life.* When the annuity ends, the remaining principal is used to create or add to a charitable fund at The Community Foundation.

The amount of the annuity is based on the age of your client at the time of the gift. In general, an income beneficiary must be 65 or older. The payments may be structured to begin when the gift is made or deferred until a later date.

The tax benefits of a CGA include an income-tax deduction in the same year that the annuity is created. Additionally, a portion of each annuity payment is tax-free. If the gift is made with appreciated securities, a portion of the capital gains is free of tax and the remaining capital gain is spread across the anticipated life of the annuity.

Minimum contribution: $20,000.

• Be sure to consider gift tax implications of an income stream for someone other than your client or spouse.

Charitable Remainder Trusts (CRT)

Your client, or another named beneficiary, can receive income payments for life or a specific number of years (no longer than 20 years). After this period ends, remaining assets are used to create or are added to an existing charitable fund at The Community Foundation.

There are two types of CRTs. A unitrust (CRUT) entitles the beneficiary to receive a certain percentage of the trust’s annual value, which may fluctuate. An annuity trust (CRAT), fixes the annual payout when the trust is created, so payments remain constant.

Your client’s tax benefits include an immediate income tax deduction and the removal of assets, along with its appreciation, from your client’s estate. If the CRT is created using appreciated securities, capital gains associated with the sale of the asset are generally both reduced and deferred.

Alternately, a CRT may be established by will, or by a revocable trust functioning as a will substitute, to provide an income stream to a spouse or other individual after your client dies.

In general, income beneficiaries must be 55 or older, unless the CRT is limited to a term of years in which case the age requirement is waived.

Minimum contribution: $100,000

Charitable Lead Trusts (CLT)

With a CLT, the charity’s interests “leads” your client’s. Your client transfers assets to a trust for a designated number of years or for the lifetime of one or more individuals (or a combination of the two). During this period, payments are made annually to one or more charities; at its termination, the remaining assets go to named individuals, frequently heirs.

CLTs are best if funded with $1,000,000 or more, and offer a way to make current charitable gifts while transferring assets at a substantially reduced gift and estate tax costs. This type of trust is recommended if your client has an interest in maximizing the benefits of a generation-skipping tax exemption while also realizing charitable intentions.

Due to the complexity and the many entities that benefit from a CLT, in general, The Community Foundation will provide only an advisory role in establishing such a trust.

Retained Life Estate

The Community Foundation will consider a gift of home, vacation home, or other real estate. Your client irrevocably deeds the property to The Community Foundation, but may retain the right to use it for life, a term of years or a combination of the two. While your client retains the right to use the property, they continue to be responsible for all necessary upkeep expenses, routine or otherwise.

After your client dies or moves, The Community Foundation sells the property and uses the proceeds to establish, or supplement, a charitable fund.

If your client has owned the property for more than one year, he/she may deduct the fair market value and may be able to avoid capital gain taxes.

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