August is Make-a-Will Month, a reminder to set aside time to think about the future, how you can protect the ones you love and support the causes you care about in the long term.
Individuals can create a lasting legacy through the use of planned giving. An excellent way for you to support the Cathedral Arts Project’s (CAP) mission is to leave a bequest in your will, living trust or with a codicil. With gift planning, you can provide long-lasting support for CAP while enjoying financial benefits for yourself.
Let’s look at two of the most common ways that you can support CAP and your other favorite nonprofits with planned giving: Bequests and Donor Advised Funds.
Note: The material found on this page is for informational purposes only. Please consult with a trusted financial advisor before making decisions involving your estate.
Bequests
Photography by Toni Smailagic of Cre8Jax
A bequest is generally a revocable gift, which means it can be changed or modified at any time. You can choose to designate that a bequest be used for a general or specific purpose so you have the peace of mind knowing that your gift will be used as intended.
Bequests are exempt from federal estate taxes. If you have a taxable estate, the estate tax charitable deduction may offset or eliminate estate taxes, resulting in a larger inheritance for your heirs.
What are the benefits of making a bequest?
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- You leave a lasting legacy to be remembered
- You lessen the burden of taxes on your family
- You may receive estate tax savings
How do I make a bequest?
A bequest is one of the easiest gifts to make. They can be made in several ways:
- You can gift a specific dollar amount or asset
- You can gift a percentage of your estate
- You can gift from the balance or residue of your estate
- You can make a beneficiary designation of certain assets
With the help of an advisor, you can include language in your will or trust specifying a gift be made to family, friends or CAP as part of your estate plan. Your attorney can help you include a bequest to CAP in your estate plan.
Types of bequests
There are a number of ways you can make a bequest to CAP.
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- Specific Bequest. A specific bequest involves making a gift of a specific asset such as real estate, a car, other property or a gift for a specific dollar amount. For example, you may wish to leave your home or $10,000 to CAP.
- Percentage Bequest. Another kind of specific bequest involves leaving a specific percentage of your overall estate to charity. For example, you may wish to leave 10% of your estate to CAP.
- Residual Bequest. A residual bequest is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity. For example, you may wish to leave 30% of the residue of your estate to CAP.
- Contingent Bequest. A contingent bequest is made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave specific property, such as a vacation home, to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the vacation home will go to CAP.
Donor advised funds
A donor advised fund (or DAF) might be a great solution for you. You can use a DAF to distribute gifts to numerous charities. With a DAF, you can make gifts to charity during your lifetime, and when you pass away, your children can carry on your legacy of giving.
Your donor advised fund has several advantages. You can make one larger gift to a DAF and then recommend grants to us and other nonprofits.
How does a donor advised fund work?
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- You make an initial, irrevocable gift of cash or stock to fund a DAF at a sponsoring organization
- The assets in your DAF grow tax-free
- You make annual recommendations on gifts to be made from your DAF
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What are the benefits with a donor advised fund?
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- Establish a flexible vehicle for annual charitable giving
- Benefit from a more tax and cost efficient alternative to a private foundation
- Obtain a charitable income tax deduction in the year of your gift
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Other types of planned giving
There are many more ways to include your favorite nonprofits into your will. More information can be found at the bottom of our Giving page.
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IRA Rollover. Congress has enacted a permanent IRA charitable rollover. As a result you can make an IRA rollover gift this year and in future years.
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Beneficiary Designation Gifts. You can designate CAP as a beneficiary of a retirement, investment or bank account or your life insurance policy.
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Charitable Gift Annuity. You transfer your cash or appreciated property to CAP in exchange for our promise to pay you fixed payments (with rates based on your age) for the rest of your life.
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Charitable Remainder Unitrust. You transfer your cash or appreciated property to fund a charitable remainder unitrust. The trust sells your property tax free and provides you with income for life or a term of years.
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Charitable Remainder Annuity Trust.You transfer your cash or appreciated property to fund a charitable remainder annuity trust. The trust sells your property tax free and provides you with fixed income for life or a term of years.
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Charitable Lead Trust. You fund a trust that makes gifts to CAP for a number of years. Your family receives the trust remainder at substantial tax savings.
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Sale and Unitrust. You give a portion of your property to CAP to fund a charitable remainder trust, when the property sells you receive cash and income for life.
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Bargain Sale. CAP purchases your property for less than fair market value. You receive cash and a charitable deduction for the difference between the market value and purchase price.
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Give It Twice Trust. You provide your children with a stream of income while making a gift to charity.
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Life Estate Reserved. You give your property to CAP but retain the right to use the property during your life.
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Blended Gifts. There are many combination gift options that can make your giving go farther than a simple gift of cash or property.
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Pooled Income Fund. A pooled income fund is a special charitable fund. You can make a gift to CAP’s pooled income fund and receive tax and income benefits in return.
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Unitrust and Special Needs Trust. If you are looking for a way to provide for a loved one who has special needs, and also make a gift to CAP, a charitable remainder unitrust and a special needs trust arrangement could help you achieve your objectives.
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What can you give?
While cash is likely the first thing that potential donors think of when considering gifts, it’s not the only asset that can be designated to a nonprofit.
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Cash. A gift of cash is a simple and easy way for you to make a gift.
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Stocks and Bonds. Donating appreciated securities, including stocks or bonds, is an easy and tax-effective way for you to make a gift to CAP.
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Real Estate. Donating appreciated real estate, such as a home, vacation property, undeveloped land, farmland, ranch or commercial property can make a great gift to CAP.
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Retirement Assets. Donating part or all of your unused retirement assets such as a gift from your IRA, 401(k), 403(b), pension or other tax-deferred plan is an excellent way to make a gift to CAP.
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Insurance. If you have a life insurance policy that has outlasted its original purpose, consider making a gift of your insurance policy to CAP. For example, you may have purchased a policy to provide for minor children and they are now financially independent adults.
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Mineral Interests. A gift of mineral interests (oil, gas, gold, silver or other precious metals) is an excellent way to make a charitable gift to CAP.
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Business Interests. As a business owner, you have the opportunity not only to build your business and accumulate wealth for yourself and your family, but also to accomplish your philanthropic goals through charitable planning. A gift of your corporate stock or assets can provide you with tax and income benefits and help further CAP’s mission.
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Contact Us
Please contact us if you have any questions about how to make a bequest to CAP or to request any additional information that might be helpful to you and your attorney as you consider making a bequest to CAP.
If you have included a bequest for CAP in your estate plan, please contact us to let us know. We would like to thank you and recognize you for your gift!
