|
 Planned
Giving
Bequests
A bequest through a will or trust is
the most common form of planned gift. A bequest allows you to make a
substantial contribution to support the mission without diminishing
the assets available to you during your lifetime. Because a bequest
to Backstreet Missions is tax deductible for federal estate tax
purposes, important estate tax savings can result, and your federal
estate tax burden may be reduced or eliminated.
Life Insurance
Gifts of life insurances can offer an
attractive way to benefit the mission 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 a young
person due to the lower premium expense. 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 support. In these situations,
donating an existing policy may be a wonderful way to support
Backstreet Missions.
Income Producing Gift Options
Some planned gift opportunities can
greatly assist the mission in meeting its needs and objectives while
also producing an income for you or your loved ones. There are many
tax benefits with these powerful planning tools.
A. Charitable Remainder
Trust
A charitable remainder trust
provides income to you or named beneficiaries during life. Payout
rates are negotiated with the board of directors. After the death of
named beneficiaries, the trust assets are transferred to the mission
and are used for the purpose you designate.
A 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.
A 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.
B. Charitable Gift Annuity
A charitable gift annuity is a simple contractual
arrangement between you and Backstreet Missions. 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
board of directors 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.
C. Charitable Lead Trust
Charitable lead trusts allow you to contribute assets to a
trust for a specified period of time. With this trust arrangement,
Backstreet Missions receives income in support of the mission from
the trust as a gift. The assets are later returned to you or your
heirs when the trust terminates. The main advantage in creating a
lead trust is to reduce federal estate taxes when transferring
property to heirs.
D. Retained Life Estate (Real Estate)
A special provision in the federal tax law allows you to
give a personal residence (including a vacation home) or farm to
Backstreet Missions and still retain the full use and enjoyment of
the property. You 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 your lifetime or for the
lifetime of you and another person. Substantial income tax and
federal estate tax benefits may be realized with this type of
planned gift.
Retirement Plan and IRA Designations
Many individuals have amassed large sums of money in
their retirement plans and 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 you wish to pass these assets to your
children. If you name your children as beneficiaries of your
qualified retirement plan or IRA, substantial income and estate
taxes may be assessed. The total combined tax burden can exceed 80%.
In other words, your family would receive only 20% of the retirement
plan or IRA. The solution has often been to name a charitable
remainder trust as the beneficiary of your retirement plan or IRA.
Your children can receive income from the charitable remainder trust
and significant taxes can be avoided. This gift vehicle can leave
your estate in much better financial position.
You can also volunteer with us, please contact Linda Kelley at (812)
333-1905 for more information.
|
