Through the years, many individuals have found planned gifts to be excellent vehicles for benefitting their favorite charitable organizations. In addition to personal satisfaction, such gifts offer major planning opportunities to minimize federal and state taxes, increasing the possibilities for effective distribution of assets. The wide degree of flexibility permitted in arranging a planned gift while still obtaining favorable tax benefits has contributed significantly to making such gifts popular and potent estate-planning tools.

There are many ways to give including both outright gifts and deferred gifts. Below are some of the most popular planned giving options. You should consult with your own tax and legal advisors for a full discussion of the tax implications of particular gift plans.

Cash
Cash is the simplest, most direct, and most popular type of charitable gift. A gift of cash is considered made on the date it is hand-delivered or mailed and, because of the charitable deduction, your net cost can be much less than the actual amount of the gift. Example: If you are in the 33% marginal tax bracket, the net cost of a $1,000 cash gift is only $670 after your after $330 tax savings.

Your cash gift is deductible up to 50% of your adjusted gross income (AIG). Any amount in excess of the 50% ceiling can be carried over for five years.
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Securities and Real Estate
Gifts of appreciated property, such as securities and real estate, are popular alternatives to cash. Such a gift generates a double tax benefit. In addition to receiving a charitable income-tax deduction for the full fair-market value of the property, you escape any potential tax on the capital-gain element in the property. Note: To qualify for this double tax benefit, the property must have been held for more than one year.
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Charitable Remainder Trusts
Introduced by the Tax Reform Act of 1969, the charitable remainder trust has grown substantially in popularity over the years because of the significant financial- and estate-planning flexibility it offers. This trust is similar to other types of trusts, except that a charitable beneficiary receives the remainder interest (i.e., what’s left in the trust after it terminates).

How it works: You transfer property under a trust agreement that specifies how and when trust income and principal are to be distributed. You may create the trust to become effective during life (inter vivos) or at death (testamentary).

An irrevocable charitable remainder trust qualifies for special tax benefits if it is in one of the following permitted forms:

• Charitable Remainder Unitrust
• Net-Income Unitrust
• Flip Unitrust
• Charitable Remainder Annuity Trust

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Charitable Lead Trusts
Charitable lead trusts may appeal to individuals who wish to make a gift but retain the property in their family. There are two types of charitable lead trusts:

Grantor Lead Trust
A grantor lead trust provides you with a charitable tax deduction for the present value of the payments the charity is to receive from the trust for a specified period of time. The donor continues to be taxed on the income earned by the trust each year – including the amount distributed to the charity. (To avoid this negative tax result, donors often fund grantor lead trusts with tax-exempt securities.) At the end of the trust term, the assets are returned to the donor.

Nongrantor Lead Trust
If a donor creates a nongrantor lead trust during life, it does not provide them with a charitable income-tax deduction, but neither are they taxed on any of the income earned by the trust. Note: At the end of the specified trust term, the assets remaining in a trust are distributed, usually to children or grandchildren.

The principal advantage of the nongrantor lead trust is that –because of the charitable gift- and estate-tax deduction attributable to the present value of the payments the charity receives from the trust – it can significantly reduce or even eliminate the gift and estate taxes on the value of the assets a donor uses to fund the trust. In addition, any appreciation in the trust’s value will avoid transfer (gift and estate) taxes when the donor’s beneficiary(ies) eventually receives the assets.
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Gift Annuities
The charitable gift annuity is among the oldest, simplest, and most popular of the charitable life-income plans. In exchange for a transfer of cash, marketable securities or, in some circumstances, real estate, the charity contractually guarantees to make specified annuity payments to the donor and/or another beneficiary for life. The payout rate depends on the age and number of beneficiaries.
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Wills or Living Trusts
Each year, thousands of individuals designate a portion of their assets via a bequest in their wills or direction in their living trusts to benefit philanthropy. Such gifts have become an important part of the American philanthropic tradition because they enable individuals to make significant gifts that they may not have been able to make during life.
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Life Insurance
While most people own some form of life insurance because of its unique ability to meet a variety of needs for financial protection, its role in charitable giving is frequently overlooked. Donors may use life insurance as the direct funding medium of a gift, permitting them to make a substantial gift for a relatively modest annual outlay. A donor may use insurance to replace the value of an asset they give to Haven Hospice.
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For more information on planned giving options, please contact:
Haven Hospice Development Department
Phone: 800-727-1889
Email: devmail@havenhospice.org
Address: 4200 NW 90th Blvd. Gainesville, FL 32606