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Each year, Children’s Hospital Foundation is fortunate to receive legacies that were planned in earlier years by thoughtful, forward-looking donors. Through provisions in their wills and other long-term plans, they made gifts that might not have otherwise been possible.
Giving through your will can be a convenient way to leave a lasting legacy. After first providing for your loved ones, you may decide to make a charitable gift of a specific amount, a percentage of your estate, or all or part of what remains after family and/or friends have been remembered.
Giving through a living trust is another idea to consider. Many make use of trusts created during life to provide for the management and future distribution of assets, then, at the termination of the trust, direct that a portion of the remaining assets be used for charitable purposes. A simple amendment can be all that is required to make a gift in this way.
The need for life insurance can change as life progresses. You may have a life insurance policy that was purchased to pay taxes but is no longer needed for that purpose. Or perhaps you have a policy that was meant to provide for your children, but they are no self-sufficient.
You can name Children’s Hospital Foundation to receive all or a portion of the policy proceeds that are no longer needed for their original purpose. You could also transfer ownership of an existing policy on which premiums are still being paid, or purchase a new policy naming the Foundation as the charitable beneficiary. In either case, future premiums can be tax deductible.
Are you aware that funds remaining in your IRA or certain other retirement accounts could be subject to estate taxes in the future along with other assets? And did you know that, unlike other assets, after payment of estate taxes your loved ones may also be liable for income tax on those amounts? The combined impact of estate and income taxes can in some cases absorb a large portion of retirement assets left to loved ones.
That is why many choose to use retirement funds to make charitable gifts through their estates and leave other, less heavily taxed assets to heirs. A gift of this type can usually be accomplished by completing a relatively simply change of beneficiary form, available from your plan administrator.
Bank accounts or certificates of deposit may be used to provide for charitable interests through what are known as Pay on Death (P.O.D.) or Transfer on Death (T.O.D.) instructions. These accounts can be titled so that whatever remains becomes a gift to charity. Check with your bank officer for details. In most states, brokerage accounts may also be left to heirs or charitable interests through similar provisions.
If you own stocks, mutual funds, or other securities that yield little income but are worth more than you paid for them, you may want to consider using them to make your charitable gifts. Giving securities can result in maximum tax savings with little or no effect on your spendable income. When you give securities that have increased in value and you have owned for longer than one year, you are entitled to an income tax charitable deduction for their full value, not just their original cost. You also do not have to pay the capital gains tax that would have been due if you had sold the property.
Learn more about your planned giving options with our bi-annual newsletter The Legacy by clicking here.