When your clients seek a deferred giving option, we are able to assist in planning and presenting the best options.
At the time your client sets up the deferred gift, we will help you and your clients establish a standard fund agreement. This agreement establishes the type of fund that best supports the causes your client cares about and seeks to support.
Fund agreements detail the purposes your client designates for his or her legacy. Should your client wish to change beneficiaries, all that is needed is to simply amend the fund agreement. It is not necessary to go through a costly redrafting of estate planning documents. This maximizes your client’s cost and time savings while fulfilling charitable goals and realizing a giving legacy.
The Community Foundation of the Lowcountry’s deferred gift types include:
A bequest is made through a donor’s will or living trust. It is simple to establish and revocable. Donors can take an estate tax deduction of 100 percent of the gift value. Your client’s bequest can be stated as a set amount either of cash, securities, or other assets, or the “residue” or a “percentage of the residue” of the estate. The bequest can also be contingent.
Charitable Remainder Trusts A donor may transfer assets to charitable remainder trust that provides a specified percent distribution to one or more (income) beneficiaries for life or a term of years with remainder interest paid to charity. Two kinds of CRTs are:
A charitable remainder unitrust requires that the trust assets be revalued annually, typically changing the value of the unitrust payment, and allows for donors to make additional gifts to the trust.
A charitable remainder annuity trust does not provide for donors to make additional gifts to the trust and CRAT assets are not revalued annually, so income beneficiary receives original cash amount.
Charitable Lead Trusts A donor may transfer assets to a charitable lead trust. A charity, such as a fund at the Community Foundation, is the income or “lead” beneficiary for a lifetime or term of years after which the remaining assets are distributed to the donor or other persons.
Gift Annuities A charitable gift annuity is a contract between the Community Foundation and donor. In return for a donation of cash or other assets, the Community Foundation agrees to pay the donor and/or someone designated by the donor a fixed payment for life. The donor can claim an immediate charitable tax deduction for the amount of transfer above the value of the annuity purchase. If a donor funds a gift annuity with long-term capital gain property, e.g., with appreciated stock, the donor will report only some of the gain, and may be able to report it in installments over many years. Donors may establish a deferred charitable gift annuity and defer receiving income from the gift annuity for a period of years.
Life Insurance/IRA Beneficiaries In larger estates, the retirement fund assets distributed to family members may be “double taxed” – first subject to the donor’s estate tax, then to income tax on the beneficiaries. IRA accounts listing a fund at the Community Foundation of the Lowcountry as the beneficiary are free of estate and income taxes. Not only can the Community Foundation be named as the beneficiary of a life insurance policy, but a donor can transfer the policy irrevocably to the Foundation and claim an income tax deduction for the policy’s costs basis or the cash surrender value, whichever is less. Any subsequent premium payments will be income-tax deductible.
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