Giving Methods to Discuss with Your Financial Advisor
Designations of Retirement Plans and IRAs
Retirement accounts, which include pension plans, profit
sharing plans, stock bonus plans, Keogh Plans, 401(k)
plans and Individual Retirement Accounts
(IRAs), generate a
number of tax consequences at the time of death of the
owner. These tax consequences make qualified retirement
assets and IRAs appropriate as charitable giving
Bequest or Devise is a gift provided for
in a person’s will.
Charitable Lead Trust, also known as Short
Term Charitable Trust or a Reversionary Living
Trust, is a trust which is irrevocable for a term of
years with the income being paid to the charity during
this term. There is a provision for the property to
revert to the trustor at the end of the term.
Charitable Remainder Annuity Trust is a trust
created by the Tax Reform Act of 1969 and provides for a
donor to transfer property to a trustee subject to
his/her right to receive a fixed percentage of the
initial net fair market value of the property for as
long as he/she lives. Whatever remains in the trust at
this death becomes the property of the beneficiary
Charitable Remainder UniTrust is another trust of
the Tax Reform Act of 1969. It is similar to the
Charitable Reminder Annuity Trust in many ways, except
the income is a percentage of the fair market value of
the property transferred, determined annually.
Gift Annuity is a contract between the Foundation
and the client. By transferring cash or other assets,
such as securities, the client will receive guaranteed
payments for life. The amount of each payment is
determined by the client’s age when the annuity is
initially funded. Married couples often choose to have
two annuitants so both will enjoy payments for life.
Gift of Life Insurance is designation of a
charitable organization as beneficiary of an insurance
policy; assignment of ownership of a policy to charity;
or gift to charity of a partial interest in the party.
Life Estate Contract is a contract that provides
for a donor to transfer title to his/her home or family
farm to a charity, reserving for himself/herself the
right to live in and on the property and receive all the
income created by the property during his/her life. At
his/her death, the home or farm becomes the property of
the charitable organization.
Payable on Death Deposit Account is a specific
type of bank account allowed in most states which is
payable on request to one person during lifetime and on
his/her death to tone or more P.O.D. payees, or to one
or more persons during their lifetimes and on the death
of all of them, to one or more payees.
Qualified Terminable Interest Property Trust is a
product of the ERTA of 1981. This trust must pay all
income to the surviving spouse for life and pass the
remaining trust principal to a designated beneficiary
(which may be a
charity) at the death of a surviving spouse.
Revocable Living Trust is a flexible revocable
agreement whereby a donor transfers income-producing
property, of almost any kind, to a trustee and receives
an income for a period of years or for life and whatever
remains in the trust at his/her death becomes the
property of the beneficiaries of the trust.