Helping You Balance Your Personal Dreams and Giving Goals

As a faithful steward of your finances, you’ve worked diligently for your money and strived to make the most tax-wise decisions regarding your budget, investing for the future and blessing your family. Meanwhile, when you’ve seen a need, you’ve also made it a priority to give…touching lives through donations to charities and ministries. Through our partnership with the planned-giving experts at Ambassador Advisors, LLC, we can help you balance your personal dreams with your giving goals, maximizing your charitable efforts through sound planning advice.

Designing a Strategy to Give the Right Asset at the Right Time

A myriad of financial strategies exist. Balancing personal goals for you and your family with charitable interests is an ongoing challenge that requires personal attention, a depth of resources and, most importantly, the right guidance from financial professionals who are recognized as some of the best in the industry. That’s where our partnership with Ambassador Advisors comes in!

The Federal Government has provided incentives for charitable giving, such as income tax deductions, capital gains reduction and estate tax minimization. Because of this, giving to any charitable organization can be maximized and taxed minimized through proper planning and solutions designed with your unique situation in mind.

We work with Ambassador Advisors because of their commitment to helping individuals like you and charities like us achieve goals. By designing a strategy to give the right asset at the right time, Ambassador Advisors can help you increase tax benefits while protecting your future needs and stretching your giving dollars. The result is that you maximize the impact of your gift and your favorite charities are able to Do More® of what you are passionate about!

What Is Planned Giving?

Simply stated,planned giving integrates your personal, financial and estate planning goals with your charitable giving goals. In so doing, you create opportunities for charitable giving in circumstances that may not otherwise enable you to make such gifts. Planned givingprovides “something for everyone” by offering great flexibility through the many giving options available!

Here are the most common types of planned gifts:

·         Bequest

·         Charitable Gift Annuity(CGA)

·         Charitable Remainder Trust(CRT)

·         Charitable Lead Trust(CLT)

·         Life Estate Reserved(Gift of Remainder)

·         Pooled IncomeFund(PIF)

·         Bargain Sale

Why Is Estate Planning Important?

Estate planning is a great and necessary act of stewardship.Whatever your stage in life, you are responsible to determine how, when and to whom to transfer everything that has been entrusted to you.  Sadly, a vast majority of individuals die without having prepared a valid estate plan. Federal tax incentives make it beneficial for personal wishes to be known and followed. In addition, a careful plan often minimizes estate settlement costs.

Estate plans:

• Are a tangible acceptance of God's plan for stewardship,
• Transfer assets to individuals and charitable beneficiaries, and
• Settle your estate in a tax-efficient manner with minimal heartache, cost and delay.

Avoiding estate planning?

Some people perceive thatlegal documents might bedifficult to understand. However, compared to trying to settle an estate without a plan, a well-defined estate plan is easy to understand!  Additionally, many people don’t understand thatGod expects stewardship.  Consider Proverbs 3:9: "Honor the LORD with your possessions, and with the firstfruits of all your increase.”  Additionally, day-to-day routines and the busyness of life leave some feeling “too busy" to develop an estate plan, and others don’t want to think about death.  Whatever the reasons for procrastinating, none lessen the devastating impact of the lack of an estate plan on the family members left behind!

Tuscarora Inn & Conference Center’s Partnership

We have arranged for our donors to benefit from the services of Ambassador Advisors. The planned giving professionals at Ambassador Advisors can provide you with confidential advice along every step of your estate planning journey.  Ambassador Advisors works with individuals to help them meet personal, family and stewardship goals!

BEQUEST

Many people desire to benefit a charity but cannot donate property to the charity while still alive. For example, an individual may need certain property to cover their living expenses or rising health care costs.  A bequest is a gift to a charity at the time of one’s death. It is the simplest type of planned gift and one of the easiest to implement.  Donors can leave property to a charity by including a bequest in their will or trust, or in the case of property that passes by beneficiary designation, a bequest can be made by designating specific charities as beneficiaries.

With a bequest, donors can retain ownership and use of the property during their lifetime and still benefit the charity by leaving the property to them upon their death. The charitiesbenefitby receiving cash or property, the donor’s heirsbenefitbecause the amount given to charity is not subject to federal estate tax, and the donor benefitsthrough the flexibility of being able to use and control the property while alive.

Charitable Gift Annuity (CGA)

With a CGA, in exchange for a gift of cash or property, a charity agrees to make fixed payments for life. This benefits donors who want to make a gift to charity but need regular payments to supplement their income.  The charity benefits through the receipt of the cash or property.

By entering into a CGA agreement, thedonor receives fixed payments to one or two individuals for life, a portion of each gift annuity payment is tax-free, the annual gift annuity payouts are based on donor’s age (rates are higher for older donors), and the donor receives a current federal income tax deduction.

CGAs especially help older donors who desire fixed payments for life. They are also attractive to donors with cash or appreciated property that produces little or no income.

In a CGA, payments are not dependent upon the charity’s rate of return, instead being based on a rate schedule. Many charities use a rate schedule set by the American Council on Gift Annuities. Under the ACGA’s schedule, the older a person receiving gift annuity payments, the higher the rate.

A pre-determined portion of each CGA payment is tax-free, and the remaining amount of each payment is taxable (at either ordinary and/or capital gain rates). A CGA contract can begin making payments immediately (“current gift annuity”) or defer payments for at least one year (“deferred gift annuity”).

Charitable Remainder Trust (CRT)

A CRT receives cash or property from a donor, makes payments for a lifetime or term of years, and then distributes the rest to charity. This benefits donors who want to turn appreciated property that produces little or no income into a productive asset without paying capital gains tax on the sale of the property.  The charity benefits through the receipt of the cash or property upon the end of the term or the donor’s death.

In a CRT, the appreciated property is sold tax-free, with donors receiving payments for life or for a term of years. Not only do they receive a percentage of the CRT’s value, but they also receive a current federal income tax deduction. A CRT especially benefits those with cash or appreciated property with a value of at least $100,000 and who want increased income.

An attorney drafts a CRT, after which the donor transfers cash or appreciated property to it. The CRT is a tax-exempt trust that can sell the appreciated property without paying capital gains tax. It can last for the lifetimes of one or more beneficiaries or for a specific term of years.

Each year, a CRT pays either an annuity amount or unitrust amount to its beneficiaries. A charitable remainder annuity trust (CRAT) pays a fixed dollar amount each year. By contrast, a charitable remainder unitrust (CRUT) pays a different amount each year in most cases.

Charitable Lead Trust (CLT)

A CLT receives cash or property from a donor, makes payments to charity for a specified period, and at the end of the period distributes the trust property to a specified beneficiary, usually family members with no additional tax. This is ideal for donors who want to give property to family members and pay as little gift or estate tax as possible. 

The charity benefits through the payments, and the donors benefit through the property and its growth being passed to family members. They also benefit through receiving a current federal gift or estate tax deduction for the present value of the payments to charity.

A CLT is especially beneficial to a donor who wants to pass along specific property that is expected to grow substantially in value. CLTs are ideal for those with estates of $3 million or more who want to pass that property to family members so as to minimize gift or estate tax costs.

An attorney drafts a CLT, after which the donor transfers cash or property to it. Unlike a charitable remainder trust (CRT), a CLT is a taxable trust. Every year of the trust term, the CLT will report its income and then take a deduction for the amount that it distributes to charity; any excess is subject to tax.

Life Estate Reserved (Gift of Remainder)

In a life estate reserved, a charity receives a gift of property — either a personal residence or farm — and the donor benefits through the retention of the right to use the property for his or her lifetime. This helps donors who may desire to leave their house or farm to charity at death, but would like a current tax benefit.

Donors can use a life estate reserved to deed a house or farm to charity but keep the right to use the house or farm for their remaining lifetime. They receive a current federal income tax deduction for the remainder value of the home or farm. A life estate reserved especially benefits older donors who have enough liquid assets available for living expenses and desire a current income tax deduction.

A donor executes a deed transferring a house or farm to charity. In the deed, the donor retains a “life estate” — the right to live in the home and use it for life. At the time of the gift, the donor and charity also enter into a MIT (maintenance, insurance and taxes) agreement specifying the donor’s responsibilities with respect to the home — including the payment of maintenance, insurance and taxes.

Pooled Income Fund (PIF)

In a PIF, a charity receives a gift of cash or stock, invests it with similar gifts from other donors and then distributes a proportionate share of earnings to the donor. This helps those who may desire to leave property to a charity at death but who currently need to supplement their income.

When starting a PIF, the donor receives earnings from the fund for life. When the donor dies, the charity keeps the PIF shares. The donor bypasses gain when appreciated property is sold, receives a current federal income tax deduction, and receives a percentage of the earnings every year. PIFsespecially benefit donors who want a tax deduction and income stream while being willing to give the principal to charity.

The donor transfers cash or appreciated property to the PIF and receives an income tax deduction for the present value of what will be left for the charity at the donor’s death. The PIF sells appreciated property, and all capital gain is bypassed. The cash or property sale proceeds are invested as part of the PIF. Each year the donor receives a percentage of the PIF earnings, which are usually taxed like all ordinary donor income.

Bargain Sale

In a bargain sale, a charity benefits through the purchase of property for less than fair market value or accepts a gift of mortgaged property. This helps those who desire to benefit a charity but cannot afford to give an entire property to the charity, or who may have mortgaged property they are willing to give to charity.

When executing a bargain sale, donors receive a cash payment or debt relief, avoid gain on the part of the property that is a gift, and receive a current federal income tax deduction for the part of the property given to charity. Bargain sales especially benefit those who own appreciated property and want to give to a charity, but who need a benefit in return (either cash or debt relief).

A bargain sale works just like any other sale except that the sale price is a bargain (less than the property is worth). A donor sells the property to charity and receives a cash payment or debt relief. The donor gets the cash or debt relief he needs, and the charity gets a valuable property for less than full price. The difference between the sale price and the appraised value of the property is a gift to the charity.