The majority of most people's wealth is in assets rather than cash. Therefore Micah's Place asks that as a committed donor, you consider planned giving as a way to benefit your own estate as well as help keep the doors open to our emergency shelter for domestic violence victims and their children.
Although you should consult your financial adviser and attorney for the most advantageous avenue for you, below is an overview of planned giving vehicles. If you should decide to include Micah's Place as a beneficiary, please call our development office at 904-491-6364 extension 102.
- BEQUEST A bequest through a will or trust is the most common form of planned gift. A bequest allows an individual to make a substantial contribution to support a charity without diminishing the assets available to the donor during his or her lifetime. Because a charitable bequest is tax deductible for federal estate tax purposes, important estate tax savings can result from this type of gift that may reduce or possibly eliminate one's federal estate tax burden.
- LIFE INSURANCE Gifts of life insurance can offer an attractive way to benefit a charity at a relatively low cost; gifts of new or existing policies may also provide tax benefits. A gift of life insurance may be especially attractive for younger donors due to the lower premium expense. For older donors, the reason for having a policy in place may no longer apply. For example, the children may be grown, there may be no mortgage remaining on the family home, or a spouse may have other assets for his or her support. In these situations, donating an existing policy may be a wonderful way to support a charitable cause.
- LIFE INCOME PLANS Some planned giving opportunities can greatly assist a charity in meeting its needs and objectives while also producing an income for the donor or his/her loved ones. There are many tax benefits with these powerful planning tools. 1. Charitable Remainder Trust A charitable remainder trust provides income to the donor or named beneficiaries during life. Payout rates are negotiated with the charity, which may or may not choose to serve as Director. After the death of named beneficiaries, the trust assets are transferred to the charity and are allocated for the purpose designated by the donor. --Charitable Remainder Unitrust - provides variable payments to the life income beneficiary or beneficiaries. The annual payments are based upon a percentage (at least 5 percent) of the annually predetermined fair market value of the assets in the trust. --Charitable Remainder Annuity Trust - provides the named beneficiary or beneficiaries with a fixed specified sum each year that cannot be less than 5 percent of the initial value of the gift placed in the trust. 2. Charitable Gift Annuity A charitable gift annuity is a simple contractual arrangement between the donor and the charity. A gift annuity provides a guaranteed fixed sum each year for the life of the beneficiary or beneficiaries. The payout rate is negotiated with the charity and is based on such factors as the age of the beneficiary(ies) and the value of the asset used to purchase the annuity. A charitable gift annuity offers many tax benefits, and part of each year's annuity payment is treated as tax free income (return of principal.)
- RETAINED LIFE ESTATE (REAL ESTATE) A special provision in the federal tax law allows an individual to give a personal residence (including a vacation home) or farm to a charity and still retain the full use and enjoyment of the property. The donor would continue to be responsible for the property's maintenance, insurance, and taxes. This retained right to use and live on the property can be for the donor's lifetime or for the donor and a surviving beneficiary's lifetime. Substantial income tax and federal estate tax benefits may be realized with this type of planned gift.
- RETIREMENT PLAN DN IRA DESIGNATIONS Many individuals have amassed large sums of money in their retirement plans and in their IRAs. The federal government's tax structure places a heavy tax burden on these assets at the time of one's death, especially if one wishes to pass these assets to his or her children. If a person names his or her children as beneficiaries of his or her qualified retirement plan or IRA, substantial income and estate taxes may be assessed. The total combined tax burden can exceed 70%. In other words, a donor's heirs would receive only 30% of the retirement plan or IRA. The solution has often been to name a charitable remainder trust as the beneficiary of one's retirement plan or IRA. The children can be income beneficiaries of the charitable remainder trust. This gift vehicle can leave a donor's estate in a much better financial position. Often, however, the donor may simply choose to name the charity as beneficiary of his or her retirement plan or IRA.
- CHARITABLE LEAD TRUST A charitable lead trust allows a donor to contribute assets to a trust for a specified period of time. With this trust arrangement, the charity receives income from the trust as a gift. The assets are later returned to the donor or his or her heirs when the trust terminates. The main advantage in creating a lead trust is to reduce federal estate taxes when transferring property to heirs.