Funding My Legacy Gift

There are many ways to fund a legacy gift, each with its own financial, and estate planning advantages.

A bequest

You can create a permanent legacy by deciding to leave a bequest of a specific amount of cash, a percentage of your estate, or the remainder of your estate in your will or living trust. There's no limit on the amount you may set aside from your estate-you may make a gift as large or as small as you'd like. You may choose to make a gift of cash, securities, or other property—and your estate will receive a tax deduction in the amount of your charitable bequest. If you have already drafted your will, your attorney can help you arrange a charitable bequest with a simple amendment, or codicil.

Here is some sample language you can use:

To [ organization name ] of [ city ], California, tax payer identification number _______________________, I give [ % of the remainder of my estate / the sum of $_____ ].

An IRA or pension plan

If you have accumulated substantial amounts in your retirement account and you are in the highest brackets for paying income and estate taxes, those taxes can exceed 70% of the amount in the plan. These are not ideal assets to bequeath to your heirs. Naming one or more charities as the after-death beneficiaries of your IRA pension fund (by designating specific amounts or percentages) can save these taxes while supporting the causes closest to your heart.

Outright gifts

When you create a legacy with a current gift of cash or other property, your fund may be used to pay an annual gift to the charity of your choice. If you donate appreciated securities held for more than one year, you can avoid capital gains taxes and receive a tax receipt for the full value of your gift in the current year.

A life insurance policy

You can fund a large gift at modest current costs by purchasing a life insurance policy and specifying the Foundation or another organization as the beneficiary. Insurance premiums and cash surrender values can be made tax-deductible, and the resulting gift can offset future estate tax obligations.

A charitable remainder trust

Charitable remainder trusts enable you to make a gift that produces income for you or for loved ones. You can take a pro-rated tax deduction now, leave the remainder to charity, and reduce estate taxes accordingly. A charitable remainder annuity trust provides fixed payouts, and a charitable remainder unitrust provides payouts which can grow as the funds invested in the trust grow. Upon the end of the term, the remainder of the trust will be contributed to complete your legacy gift to the Jewish community. Charitable remainder trusts require a larger gift than charitable gift annuities, but provide more flexibility.

 

These descriptions are provided for informational purposes only, and do not constitute legal or tax advice. Please consult a financial or estate planning professional to understand the implications of a gift for your particular circumstances and goals.

 

For more information, or for a referral to a financial or estate planning professional, please contact Steve Brown, Director of Legacy Development, at (510) 433-0134, ext. 215 or stevejfedorg.