Other Options

	Other Gift Options

Life Insurance | Pooled Income Fund | Charitable Lead Trust | Retirement Plans

Life Insurance
Some of our supporters no longer need their life insurance that was purchased years ago to provide for children or other family members. If that is your situation, please consider donating the policy to the American Red Cross of the National Capital Area. You may claim a charitable deduction for approximately the policy's cash surrender value, and the proceeds are completely removed from your estate.

Pooled Income Fund
Your gift of money, marketable securities, or both to the American Red Cross of the National Capital Area's pooled income fund is invested together with similar gifts from other supporters. Each year, you receive your share, which is taxable as ordinary income, of the fund's earning.

For example, Mr. Simon's $10,000 life income gift is invested in our pooled income fund. The fund's net income is 6 percent this year, so he receives $600--his share of the annual earnings. Each year, Mr. Simon's payment will reflect any increase or decrease in the fund's net income.

Charitable Lead Trust

Individuals with very large estates can use a charitable lead trust to benefit the American Red Cross of the National Capital Area and pass principal to family members with little or no tax penalty. It works like this: You transfer assets to a trust that provides payments to the Red Cross for a term of years. Then the trust principal goes to your children, grandchildren, or others free of, or at greatly reduced, federal gift and estate tax. (Please note that a generation skipping tax [GST] is imposed on large transfers to grandchildren and others who are more than one generation younger than you.)

Retirement Plans
Many individuals today have large qualified retirement plans such as an IRA, 401(k), or Keogh plan. These assets have been growing tax-free for years. Once the owner begins to receive payments from the qualified plans, the distributions are taxed. The plans are also included in the owner's taxable estate. A retirement plan may be an excellent source of funds for making a gift to the American Red Cross of the National Capital Area.

One way to make a gift of your retirement plan is to create a charitable remainder trust through your will. It works like this: Your IRA assets will be transferred to a charitable remainder trust. There is no tax due because the charitable remainder trust is a tax-exempt entity. The trust will provide life income to the beneficiary (for example, your child) with an eventual gift to the Red Cross. The beneficiary will pay income tax on the distributions from the trust. Your estate will receive an estate tax charitable deduction for the value of the Red Cross's right to eventually receive the trust assets.

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The American Red Cross