You can make an eternal difference through planned gift arrangements of outright gifts such as cash, property, stocks and bonds, mutual funds and real estate. Below are some examples:
Wills: Benefitting your loved ones and others
In addition to being one of the simplest ways to distribute your estate, your will can also be a creative vehicle through which to make thoughtful gifts.
After providing for the needs of your loved ones, you may choose one of several ways to touch other individuals’ lives.
By having your attorney revise your will or add a simple amendment, you can make a charitable bequest of a dollar amount, specific property, a percentage of your estate, or what is left after others have been taken care of. You may also wish to name one or more charitable recipients in case others you have named do not survive you.
A donor can enter into a gift annuity agreement with the Baptist Foundation of Maryland and Delaware. They will then make a gift to the ministries of their church and receive a fixed income for life. This gift may be in the form of cash, securities, or marketable real estate.
One benefit of entering into a gift annuity agreement is that a gift annuity will provide an income that cannot be outlived. Another benefit is that it will provide a significant income tax deduction in the year of the gift because a part of the income is not taxable.
Many people do not realize how convenient and welcome a gift of life insurance can be.
Life insurance needs change as life goes on. Children become self-sufficient and investments may provide unexpected income and security. After such developments, some life insurance coverage may no longer be needed for the reason it was originally purchased.
Also, because federal law now exempts many estates from taxation, life insurance purchased to cover estate taxes may be obsolete.
One of the simplest ways to make a significant gift in the future is to name a charitable beneficiary to receive all or a portion of the proceeds of a policy which is no longer needed for family protection.
Another way to make a gift of insurance is to take out a new policy, naming a favorite cause or causes as beneficiary or co-beneficiary. Many find this a convenient way to make a special gift “on the installment plan.” You can assure a gift which may be much larger than its cost.
Whether in a company pension plan or other private fund such as an Individual Retirement Account, you may accumulate funds beyond your needs for comfortable support of yourself and loved ones.
In such a case, it may be very easy and convenient to make a gift of such accounts to perpetuate work you consider vital for the well-being of future generations.
It can be satisfying to know that the funds for which you have worked a lifetime and carefully saved may ultimately be put to good use when you no longer need them.
All of the ideas we have discussed can include a loving tribute to a friend or loved one. There may be no more meaningful way to honor a life than by a gift with lasting meaning.
Examples of memorial gifts are endless. Many organizations and institutions enjoy buildings, equipment, scholarship and endowment funds, and a multitude of other services which have been made possible by gifts in memory of loved ones.
Your imagination is the only limit to the ways in which you can honor a special person. We will be glad to assist you in choosing an appropriate commemoration for your gift.
Revocable Living Trusts
One of the most flexible giving plans is the revocable living trust, a gift that can be revoked or taken back.
Gifts should only be made on a permanent basis when it is in your best interest to do so. Through a revocable trust arrangement, you can make gifts of property and/or income now while retaining the rights to retrieve the property if necessary. Such a plan can result in estate settlement savings as well.
You may find this to be a convenient way to create a “living endowment” to which you can add each year. The earnings from the property will be paid to you, to others you name, or to fund charitable gifts-as you choose. If you require the property for any reason, it will be returned to you promptly upon request.
A charitable remainder annuity trust is a way to make a gift that allows you to retain income from your property for life. Your funds are held separately and invested to earn a fixed and regular income for you.
Trust income can be a welcome supplement to a retirement plan. Management of assets can be achieved for yourself and surviving loved ones. At your death (or at the death of your surviving spouse or other loved one, if you designate), whatever remains in the trust is distributed to charitable beneficiaries.
The payments you receive each year will be at least 5 percent of the amount placed in the trust. The exact amount is determined by you when the plan is created. A tax deduction is allowed at the time you create your trust. Its size depends on your age, payment percentage, and other factors.
Like the annuity trust, the unitrust provides for a gift which returns an income. But unlike the annuity trust, the income from a unitrust rises or falls with the value of the assets placed in the trust.
You determine the percentage of payout when the gift is made. Each year this percentage of the value of the trust assets is paid to you or others you select. When the value of the trust investments goes higher, more income is received. The income will be less if the value of the assets declines.
Additions can also be made to this trust, and a tax deduction is allowed for a portion of each amount contributed. For many taxpayers, deductions for Individual Retirement Accounts (IRAs) and other plans are now limited, so the unitrust could play a big role in planning for retirement years.
Charitable Lead Trusts
People who wish to make a meaningful gift over a period of years but want to be assured that their property will ultimately pass to loved ones will be interested in a variation on the theme of charitable trusts-the charitable lead trust.
The lead trust can be one of the few ways to eliminate taxes which would otherwise be due on assets left to children or grandchildren.