Consider Planned Gifts as an Option

Planned gifts are made when the donor decides to make a gift, but the Community Foundation doesn't get full use of the asset until a later date, usually after the donor's death. The two types of planned gifts include:

• (1) those in which the donor receives no life income, such as wills and life insurance, and
• (2) those that give the donor life income, such as charitable gift annuities (CGAs), charitable remainder unitrusts (CRUTs), and charitable remainder annuity trusts (CRATs).

Planned giving through the Mid-Shore Community Foundation gives donors two tax benefits:

• a charitable income tax deduction in the year of the gift, and
• reduction of future estate taxes.

If your clients use long-term appreciated property (publicly traded stocks and securities, mutual fund shares, real estate, and/or closely held company stock) to establish their fund, they can often avoid capital gains taxes on that property. They can also receive the full, fair market value of the gift as their charitable deduction. Charitable gifts at death generally result only in a reduction of estate taxes, however, gifts of retirement plan assets, U.S. savings bonds and other untaxed assets will also result in income tax savings.

Deferring a Gift for the Future

If you have a client who is interested in deferring a gift for the future, the Community Foundation is happy to assist with all types of planned giving vehicles including the following:

Bequests. The simplest gift is a bequest in a will or trust that directs specific assets or a percentage of your client's estate to establish a fund or add to an existing fund.

Charitable Remainder Trusts. Contributing a gift to an irrevocable trust provides your client with fixed or variable payments for their lifetime or a specified term of years. The remainder goes to the Community Foundation and creates a permanent fund in a donor's name. These instruments enable your client to retain income from an asset while securing a charitable deduction and avoiding capital gains tax.

Charitable Lead Trusts. Your donor gives income-producing assets to fund a trust with income flowing to a named fund at the Community Foundation during the term of the trust. Afterward, the assets flow to their heirs free of tax on the assets appreciation.

Charitable Gift Annuities. A simple contract guarantees your client and/or a second annuitant a fixed income in exchange for a gift to the Community Foundation. Annuity rates are set by the American Council on Gift Annuities. Donors may increase income while securing a charitable deduction and avoiding capital gains tax.

Retirement Plan and Life Insurance Beneficiary Designations. Your client may create a named fund in the Community Foundation by making us the beneficiary of a retirement plan such as an IRA or a life insurance policy. At death, the assets transfer to the Community Foundation, avoiding estate and income taxes.

If you have any questions please call Mid-Shore Community Foundation, at 410-820-8175.