Charitable Gifts: You Have Many Options
There are many ways to make gifts, both during life and at death. As our tax laws change, new ideas continue to be developed. Quite often, a planned gift is defined by the type of resource that is given. It is often from resources beyond one’s checkbook and the offering plate. It may be from accumulated assets such as stocks and bonds or from life insurance, retirement plans or real estate. A planned gift can be given at any time. It can be a gift made in one’s lifetime or it can be a gift through one’s estate. There is often a tax advantage to planned gifts. Though this seldom is the primary motivation for the gift, it has a significant role to play in determining the size of the gift and when it is given. However, the most important alternatives today include the following:
Outright Gifts: A Common Choice
The most popular method of making a charitable gift is through an outright transfer. Usually, outright charitable gifts are in cash, but any type property including stocks, bonds, real estate and collectables may be given to the church.
Real Estate: A Valuable, Often Overlooked Opportunity for Giving
Any type of real estate can be given to the UPUMC. In fact, a gift of personal residence, farm, or ranch may be made to the church now, while you continue to live there during your lifetime. A current income tax deduction may still be available. Outright gifts of other real estate can also qualify for an itemized charitable income tax deduction.
Life Insurance: An Opportunity to Give Beyond Your Means
Many individuals name their church as the owner or beneficiary of a life insurance policy. This gift at death may be much larger than any gift they might otherwise be able to make.
Some individuals who want their life insurance proceeds paid to their family, name the church as the contingent beneficiary to receive the proceeds if their family members do not survive the insured. The church may also be named as the recipient of annual dividends from insurance policies. All of these gifts occur without probate or other administrative delay.
Retirement Funds: An Increasingly Popular Item to Give Away
More and more people are naming the church as a contingent beneficiary of their retirement plans or individual retirement accounts, to succeed other family members. If you and other family members die before receiving all of the funds, the church receives the remaining property.
Bank Accounts: An Inexpensive, Flexible Gift Opportunity
A popular way to make a charitable gift is to open a bank account in trust for the church. The person who opens the account has the right to make deposits, to make withdrawals, or to close the account at any time. The balance remaining in the account at death automatically becomes the property of the named charity. This occurs without probate or other administrative delay.
Planned Gifts: The Foundation offers the following planned gift options:
- The Charitable Remainder Unitrust is an irrevocable transfer of property to a trustee who pays you and/or your chosen beneficiaries an income for life. The income is a fixed percentage of the annual fair market value of the trust. Thereafter, the trust assets become the sole property of the charity.
- The Charitable Remainder Annuity Trust is similar to a Charitable Remainder Unitrust, except the annual income paid to the beneficiary is a fixed annual amount.
- A Charitable Gift Annuity provides for a fixed annual payment for the life of the beneficiaries.
- Charitable Bequests at Death using wills or trusts leave a charitable legacy. Outright gifts at death through a will or trust are perhaps the most common method of making a bequest at death to a charitable institution. This may be a fixed dollar amount, a percentage of the estate, a distribution as a successor to a deceased beneficiary, or a gift as the final taker if all named beneficiaries are deceased.
