Planned Giving makes it possible for you to make a significant legacy gift during your lifetime that will be a benefit to the Lifestyle Enrichment Center (LEC) in the future. Planned gifts come in a variety of ways, but it is vital that you plan now so you can derive tax benefits and not obligations to your heirs. Outlined below you will learn some of the many ways you can make a difference in helping the 60+ population of Columbia County, Florida.
When you itemize you can lower your income taxes simply by writing a check to the LEC. Gifts of cash are fully deductible – up to a maximum of 50% of your adjusted gross income. If your adjusted gross income for the current year is $60,000, up to $30,000 of charitable gifts may be deducted this year. If there are any excess dollars they can be carried forward and deducted over as many as the next five years.
Gifts Designated in A Will
If your estate is subject to the federal estate tax, a charitable bequest can save significant tax dollars. LEC can be named as a beneficiary in your will in several ways.
- Outright bequest: You can specify an outright gift of cash, securities, real estate or tangible personal property. If you bequeath dollars, you may wish to bequeath a certain fraction or percentage of your estate to us, rather than a fixed sum; this serves as a hedge against both inflation and unforeseen shrinkage, and assures your heirs their proportionate share.
- Residual bequest:A residual bequest provides that, after specific bequests are made to named individuals, LEC receive the “residue” or the amount remaining in the estate.
- Contingent bequest:A contingent bequest means that LEC will receive certain assets only if a named individual does not survive you. For example, you could provide for LEC to receive a bequest only if your spouse does not survive you. Such a provision recognizes the need to provide first for the security of others.
- Testamentary trust: Such a trust can provide income for another person or persons for life, with the principal ultimately passing to LEC. In the alternative, you could designate that the income come to LEC for a certain number of years and the principal ultimately pass to family members or others.
- Codicil:If you already have a valid, up-to-date will, you can have your attorney prepare a codicil to your will naming LEC as a beneficiary without having to rewrite your entire will.
If you own stock, it is often more tax-wise to contribute stock than cash. This is because a, gift of appreciated stock generally offers a two-fold tax saving. First, you avoid paying any capital gains tax on the increase in value of the stock. Second, you receive an income tax deduction for the full fair market value of the stock. Make sure you have owned the stock for a “long-term” period of time (this generally means that you have held the stock for more than one year) to qualify for these significant tax advantages. Gifts of appreciated stock are fully deductible – up to a maximum of 30% of your adjusted gross income. For example, if your adjusted gross income for this year is $100,000, up to $30,000 of long-term appreciated stock and other property gifts may generally be deducted this year. Any excess can generally be carried forward and deducted over as many as five subsequent years.
Real Estate Gifts
A gift of real estate can also be tax -wise. A residence, vacation home, farm, acreage, or vacant lot may have so appreciated in value through the years that its sale would mean a sizable capital gains tax. By making a gift of this property instead, you would avoid the capital gains tax, and, at the same time, receive a charitable deduction for the full fair market value of the property. It is also possible to make a gift of your home, farm, or vacation home so that you and so that you and your spouse can continue to use it for your lifetime while you receive a current income tax deduction.
Life Insurance Gifts
A gift of life insurance can provide a significant charitable deduction. You could purchase a new policy or donate a policy that you currently own but no longer need. To receive a deduction, designate LEC as both the owner and beneficiary of the life insurance policy. Check with your insurance agent for the details.
Retirement Account Gifts
With retirement plan assets subject to federal estate and income taxes, approximately 70% of these assets can go to the IRS instead of your intended beneficiaries at the time of death. Retirement plans still serve very valid purposes – such as income tax deferral during your lifetime. The tax problem principally arises at the time of death. IRAs and other retirement plan assets make the perfect charitable gift at the time of death.
Suggestion: Consider leaving LEC a charitable gift of all or a portion of your retirement assets – with your other “lower-taxed” assets passing to your children, grandchildren, and other intended beneficiaries. Any amounts transferred to LEC at the time of death will avoid federal estate and income taxes.
Suggestion: Another good option – to provide for a surviving family member and benefit LEC at a later date- would be to ask your attorney about using the assets from your IRA or other retirement account to fund a “testamentary charitable remainder trust.” Such a trust could provide a lifetime of income for your surviving spouse, children, or others, and then benefit LEC. This could help you save tax dollars while you provide a solid stream of income and possible tax benefits to your heirs.
Tax Planning: Under current law, it generally does not make sense to contribute retirement plan assets to charitable institutions and organizations during your lifetime – because of the ordinary income taxes you would incur. Lifetime transfers from a retirement plan to a charity cannot be made on a tax-free basis. Every distribution from a retirement plan is generally taxable as ordinary income. (As discussed above, it does, however, make excellent sense to consider gifting these assets to charity at the time of death.) Please know that Congress has been considering changes to these tax laws that could make future I lifetime charitable gifts of retirement plan assets much more favorable.
For more information or to ask any questions, please call Development Office at 386-755-0235 ext. 108
The “Third Third”
This phrase refers to the third third of life — after youth and career — when you can do what you want surrounded by the activities offered at the Lifestyle Enrichment Center.
628 SE Allison Ct.
Lake City, FL 32025
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