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Goal: Defer a gift until after your
lifetime
Benefit: Your donations are fully exempt
from federal estate tax and you retain control of your assets
Diagram
David and Ann originally established a fund that would help purchase needed equipment, supplies, and provide for maintenance. They had made an outright gift of some appreciated stock. It was later, after their experiences with the staff, that they changed their will to include a bequest that will magnify the fund tenfold.
Ann: "We felt good about helping
through establishing a small fund,
but we had no idea what the fund would
bring to us."
David: Over the years, we have met with some of the people involved who are on the front lines - doing the work. We've even been able to help a little ourselves. I can't describe how good it feels to sit with these people, to hear them describe their dreams and ambitions and how we've helped. What a joy to realize that we have become a part of their future and that these people have literally become a part of our family."
Ann: "I feel like we really have accomplished something good!"
Setting
all the emotional rewards aside, this
was a wise financial move. First,
there were some immediate tax benefits
on the initial gift based not on the
cost of the stock, but on its appreciated
value. Second, their estate will benefit
by having a write-off to charity through
the bequest (see
bequest information).
There is some additional information available about the benefits of utilizing a charitable bequest and how bequests enable you to keep control of your assets.
Using funds from a retirement account to make bequests is often a good strategy. If there is a balance in your retirement account at your death, not only is there a potential income tax burden, but there may be estate taxes as well. Estimates are that taxes could eat up as much as 70-75 percent of retirement assets under certain circumstances. Careful planning concerning retirement funds needs to be done. Some additional information regarding retirement assets is available.
Another option to consider in making a gift is to use life insurance policies that are no longer needed or necessary. There are some different ways to make a gift of life insurance.
Ann and David found their experience enriched their hearts and lives. Often donors are surprised by just how wonderful the giving experience is.
Now click here to meet Joyce.