Bequests and Planned Giving
The Legacy Society - Giving Beyond Our Lifetimes
For more than eleven years, we have been a trusted partner for individuals and generations of families who wish to perpetuate their giving beyond their lifetimes.
The Community Foundation’s Legacy Society fulfills your needs and interests by offering the full range of today’s planned-giving options. Moreover, you are assured that your gift is expertly managed, efficiently administered, and your wishes honored and upheld permanently.
Types of Planned Gifts
The Community Foundation offers a number of planned giving options to match your client’s needs and giving interests.
Gifts That Pay You Income
w Charitable Remainder Trusts
w Charitable Gift Annuities
w Pooled Income Fund
Gifts that Pay The Community Foundation and Preserve Assets for Your Heirs
w Charitable Lead Trusts
w Beneficiary Designations: Life Insurance,
Property, and Retirement Plan Assets
w Bequest
Other
w Securities
w Cash
Charitable Remainder Trusts
Charitable Remainder Trusts (CRTs) are flexible vehicles allowing you to make a substantial charitable gift while retaining an income stream (for yourself and/or others) either for life or for a fixed number of years. At the end of the term of the trust, the remaining assets pass to a fund of your choosing at The Community Foundation.
CRTs are particularly well suited for gifts of appreciated securities and other assets such as real estate or securities producing little or no income at the time of the gift. Because the CRT is tax-exempt, it can sell the asset without incurring capital gains tax and reinvest for a higher yield.
This flexible planned-giving strategy is best suited for gifts of $250,000 or more, and can be established during your lifetime or by will to provide income for family members. A CRT may help you eliminate capital gains taxes, reduce or eliminate estate taxes, improve lifetime cash flow and, when coupled with an asset replacement trust, provide for heirs.
The Community Foundation can act as a remainderman for CRTs by establishing endowed funds in the name of the original donor to make income gifts in perpetuity to the nonprofit organization of the donor’s choice. Successive generations may be involved in the distribution of grants if the donor so wishes.
Charitable Gift Annuities
A Charitable Gift Annuity is an agreement between you and The Community Foundation. You make an irrevocable gift of at least $10,000 to The Community Foundation and receive a fixed, guaranteed income from The Foundation each year for the rest of your life and/or the life of another person whom you designate. Upon the death of the life income beneficiary, the remaining value of the annuity gift is allocated to an endowed fund of your choosing at The Community Foundation. This fund then pays out income on a semi-annual basis to the nonprofit organization(s) that you designate.
You can start receiving the income immediately or defer the start of the annuity payments until a later date. Because the payments can be deferred, gift annuities are a popular vehicle for supplementing retirement income. Annuity rates are based on the age of the annuitant(s) at the time of the gift and on whether the income payments begin immediately or are deferred. The older the designated annuitant(s) at the time of the gift, the greater the fixed income The Community Foundation can agree to pay.
This vehicle can ease the worries of outliving financial resources by providing a high income coupled with numerous tax advantages. It also creates a charitable legacy that will benefit our community in perpetuity.
Pooled Income Funds
Our Pooled Income Fund allows you to make a gift to a permanent fund at The Community Foundation and also benefit from lifetime income and tax savings. Your gift of at least $5,000 to the Foundation’s Pooled Income Fund is co-mingled with gifts from other donors for investment purposes. You receive quarterly distributions of the income earned by the fund based on your proportional share of the total fund. Additional gifts (minimum $1,000) may be made to the fund at any time. Upon the death of the last income beneficiary, your portion of the fund principal will pass to a permanent fund at The Community Foundation or to a charitable organization of your choice.
Your gift to the Pooled Income Fund will provide a stream of income for life for up to two income beneficiaries. You will receive an immediate charitable income tax deduction in the year of your gift. You will also avoid capital gains tax on long-term appreciated property.
Charitable Lead Trusts
A Charitable Lead Trust allows you to provide income to your fund at The Community Foundation for a fixed number of years. You will make payments immediately (in a fixed amount or percentage of the assets) to a fund at The Community Foundation. With the most common type of Charitable Lead Trust (a non-grantor charitable lead trust), at the end of the trust’s term, the remaining assets are returned to you or your named beneficiary.
Charitable Lead Trusts are an excellent vehicle for making an immediate charitable gift to a Donor Advised Fund at The Community Foundation, while being able to transfer assets to others after a period of time free of estate and gift taxes.
Beneficiary Designations
Gifts of Retirement Plan Assets
Retirement assets that pass to your heirs can be subject to estate and income taxes, and the taxes can total more than 70 percent of the assets. Many donors elect to avoid these taxes by designating The Community Foundation as the beneficiary of their retirement accounts and directing other assets such as appreciated stock to their heirs.
Gifts of Life Insurance
One of the easiest ways to make a substantial contribution to The Community Foundation is to give a life insurance policy. You may give a policy no longer needed, take out a new policy or name The Community Foundation as a beneficiary of an existing policy. A gift of life insurance may provide valuable income and estate tax savings.
Bequests: More Than a Will
Bequests take a variety of forms such as a specific amount, a percentage of your estate, or a certain asset. You can name The Community Foundation as the “residuary beneficiary” of all or part of your estate after other bequests have been made or as a “contingent beneficiary” in the event that other named beneficiaries do not outlive you.
Bequest to an Agency Endowment Fund
You can make a bequest to an Agency Endowment Fund that collects and invests contributions from many donors. The earnings from the fund principal are used to support the programs or operations of a nonprofit organization. The Agency Endowment frees small nonprofit organizations from the administrative and investment burden of their assets.
Bequest Through a Charitable QTIP Trust
Another type of bequest can be made through a Charitable QTIP (Qualified Terminable Interest Property) Trust, which allows you to direct the income from the trust (and principal, if needed) to your spouse for his or her life. At the end of the trust’s term, the remaining assets will pass to a fund of your choosing at The Community Foundation. If you create the trust to take effect at your death for the benefit of your spouse, the trust is completely free of estate and gift taxes.
For More Information
Sally Rudney
Executive Director
(301) 588-2544
srudney@cfncr.org
| 
