What are the benefits of planned giving?
Planned giving can be a great way to benefit charitable causes while still leaving sufficient funds for loved ones. Whether donated through wills, trusts, investments, property, life insurance, retirement plans, or more, planned giving is an opportunity to provide for your loved ones, fulfill your charitable goals, and save money on taxes.
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What should I know about planned giving?
The most important thing to know about planned giving is the options before you and the benefits of each. While all methods are excellent opportunities to give to the community and receive tax benefits, certain avenues will better serve some givers than others. For instance, giving through stocks, bonds, or mutual funds may be the best opportunity for someone with investments that have appreciated in value. By giving a percentage of securities, one can forgo capital gains tax, and therefore save their security from taxation. Others might receive more benefit from giving a portion of their property, valuable assets such as art or jewelry, or giving directly through cash donation.
Regardless of background or estate, it is highly recommended that all people draft wills. The construction of a will can have a significant impact on taxation, donating, and passing funds to loved ones. A will is the best place to include information about planned giving and distribution of your estate.
While charitable gifts can be made directly through payments or your will, there are many other options also. For example, offering a percentage of your property to charity is a meaningful way to give back, and you can still remain living in your home for as long as you need (you may also receive tax deductions). Also, you can make arrangements in your will to donate only what is left over after the needs of your loved ones are met. Below is a list of the most common gift planning options to choose from. If these gift planning options interest you, please discuss them with your professional advisors.
- Bequests by Will are the most popular means of gift planning. Reduce estate taxes by designating a certain amount or a percentage of your estate to United Way.
- Gifts of Stocks, Bonds and Mutual Funds that have appreciated in value and are owned for more than one year can result in triple tax savings through state and federal income tax opportunities and can bypass capital gains taxes.
- Gifts of Real Estate offer a double tax savings. Receive a charitable income tax deduction for full market value and you will avoid capital gains tax.
- Retirement Plan Assets such as IRAs and pensions or profit sharing plans are subject to more than just estate taxes at your death. Prevent double taxation for you and your heirs with a charitable gift of retirement assets.
- Charitable Remainder Trusts allow you to retain income interest and give the remainder to charity. Receive a charitable income tax deduction and avoid capital gains tax and estate taxes, while the trust accumulates tax-free to benefit United Way.
- Charitable Gift Annuities provide a lasting income plan. Assets are transferred to United Way with the agreement that a fixed rate of return will be paid to named beneficiaries for life.
- Charitable Lead Trusts offer a tax-efficient way to transfer wealth and property from one generation to the next while making a significant charitable contribution. They provide United Way with an income stream for a period of years and then pass underlying assets on to your beneficiaries.
- Life Insurance policies that are paid up may result in significant tax savings. If you name United Way as the beneficiary and owner of the policy, future premium payments may be tax deductible. United Way may also be named as partial or secondary beneficiary.
In addition to these methods of giving, one may also choose to donate to the Legacy of Caring Endowment Fund. By donating to this fund, you leave a gift of lasting significance that continually supports the community and never depreciates.
For more information about this option, please visit the Legacy of Caring Endowment Fund page.
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Where do I start?
The best place to start is with your will. Because wills are complicated and "homemade" wills are often dismissed in courts, it is best to seek an attorney for help in drafting your will.
It is also a good idea to contact any charitable organizations that you plan on including in your will. Your organization(s) of choice will be able to speak with you about giving options.
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How can I make a difference?
No matter how small your gift or estate, your donation can make a significant impact on the community. For assistance in planning your gift, please contact Anne Keefe at 407-7004.
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Your annual gift changes lives today.
Your planned gift changes lives tomorrow.
Your gift to the Legacy of Caring Fund changes lives forever.
Disclaimer: United Way of Larimer County does not provide tax advice. Always consult your tax advisor.
