Bequests & Wills/Living Trusts
The simplest way to make a planned gift is by naming our parish in your will or living trust. A bequest is a meaningful way to support our church’s work without affecting your cash flow during your lifetime. The bequest can take the form of a set amount of money, a percentage of an estate, a specific asset, a trust, or the naming of the church organization as a contingent beneficiary.
Sample language for including the church in your will might be: “I give, devise, and bequeath (state amount, asset, or percentage of the estate) to (name and address of your church) to be used as the church’s vestry deems appropriate.”
Your attorney can include it when you prepare or revise your will/living trust.
Life Insurance
Life insurance is another way to make a sizeable gift to the church. For example: You can purchase a new policy and make the church the owner and beneficiary of that policy. This enables you to “leverage” your gift, ultimately making a much larger gift than otherwise possible. Contributions to your church to pay the ongoing premiums become tax deductible. You can also make the church the owner and beneficiary of an existing policy. The current value of the policy is tax deductible, as are future premium payments. You can make the church a contingent beneficiary of an existing policy, or name the church to receive the proceeds of the policy if the designated beneficiaries predecease the insured. Your life insurance professional can assist you with making such gifts.
Retirement Accounts
The remainder value of many retirement accounts can be heavily taxed when left to friends and family, but will pass tax-free to your church or other charities upon your death. Review with your attorney or financial advisor to learn if this is an appropriate gift for you.
Life Income Gifts
Life income gifts provide you or your designated beneficiary income for life in exchange for your gift. The three most common types of life income gifts are a pooled income fund, a charitable gift annuity, and a charitable remainder trust.
Pooled Income Fund
In the Pooled Income Fund, gifts ($2,500 gift minimum) are “pooled” with other gifts and invested in a professionally managed investment portfolio. The donor receives the following benefits:
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A guaranteed income for life. The amount of the income depends on the rate of return on the fund’s investments. The income can also flow to another designated beneficiary.
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An immediate federal income tax deduction. The amount of the deduction is usually based on the age of the donor and/or beneficiaries.
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The elimination of capital gains taxes, if funded through appreciated securities such as stocks, bonds, or mutual funds.
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A possible reduction in estate taxes.
At the death of the final beneficiary, the property goes to the church that you named.
The Charitable Gift Annuity
The benefits of establishing a Charitable Gift Annuity are similar to that of the pooled income fund with the following differences:
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The minimum gift is $5,000.
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The income for life is guaranteed at a fixed amount.
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A portion of the gift is deductible.
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A portion of the income received is tax exempt.
Charitable Remainder Trust
A Charitable Remainder Trust is available to donors using assets of $100,000 or more. They can be funded with various types of assets, including real estate. Like the pooled income fund and the charitable gift annuity, the charitable remainder trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes. The income fluctuates based on the performance of the portfolio. If you are seeking fixed income annually, a charitable remainder annuity trust is an option to consider.
Charitable Lead Trust
The Charitable Lead Trust, another estate planning tool, enables you to transfer assets to a trust that pays its income to the church for a set period of time. At the end of the term, the principal and all capital appreciation returns to you or others that you name.
