Frequently Asked Question's
Should I name a charity as trustee of my charitable remainder trust?
This is often done if the organization is qualified to so act under local law. The
organization's representatives can satisfy you in that regard. Often they will serve
without fee, which is an additional incentive
Can I use my insurance to benefit charitable organizations?
Yes. This is an area overlooked by many. You can name one or more charities as an
alternate or as a primary beneficiary. Furthermore, if you no longer need the policy
proceeds in your estate for use now, you can transfer ownership of the policy to the
charity or charities. If the policy has cash loan value, the charity can draw this out and
use it. In this case, you not only receive a charitable gift deduction, but any additional
premiums you pay are tax deductible for you now. And, on your death, the charity receives
the balance of the policy proceeds and none of it is included in your estate for tax
purposes.
How can I fund a charitable gift annuity and how is my income
calculated?
The usual funding sources for a charitable gift annuity are cash and marketable
securities. There can be tax benefits associated with the gift of appreciated securities
(the current market value exceeds the cost or basis value). As a gift annuity is
considered partially a gift and partially an annuity, part of the gift avoids capital
gains tax entirely. Real estate and other marketable assets may also be used. However, the
acceptance of these types of assets is considered on a case-by-case basis. Generally, and
if accepted, the charity will convert the assets to cash to fund the annuity.
The income provided you by the annuity is determined by your age and the age of any additional beneficiary and is calculated using tables established and filed with regulatory agencies under which the charity operates its annuity program.
Can I set up a charitable gift annuity and delay the start of the
income until I will more likely need it, such as at my retirement, when my income is
lower?
Yes, the flexibility associated with establishing charitable gift annuities makes them a
popular and effective retirement planning vehicle. Using a deferred gift annuity, the
annuity earnings accumulate on a tax-deferred basis. Thus the deferred payment annuity
accomplishes several things. First, the donor receives a tax deduction in the year the
annuity is established, which would in theory be when the donor is in a higher tax
bracket. Secondly, the gift to the charity becomes larger as the deferred earnings
increase the annuity's principal. Finally, since the deferred payment annuity grows in
size while income is deferred, the ultimate income will be more per year.
Certain program activities were underwritten by the
Department of Economic Development Neighborhood Assistance Program (NAP)
Recycling
Program