Planned Giving Definitions and Options

WHAT ARE THE TAX BENEFITS OF PLANNED GIFTS?

Donors can contribute appreciated property, like securities or real estate, receive a charitable deduction for the full market value of the asset, and pay no capital gains tax on the transfer.
Donors who establish a life-income gift receive a tax deduction for the full, fair market value of the assets contributed, minus the present value of the income interest retained; if they fund their gift with appreciated property they pay no upfront capital gains tax on the transfer.
Gifts payable to charity upon the donor’s death, like a bequest or a beneficiary designation in a life insurance policy or retirement account, do not generate a lifetime income tax deduction for the donor, but they are exempt from estate tax.

Your generosity to the Intrepid Fallen Heroes Fund can continue forever… choosing the right planned giving option for you depends on your circumstances and your giving goals.

The Many Ways to Give:

Will or Living Trust

The Intrepid Fallen Heroes Fund can be named in your Will or living trust as a planned gift. This requires the services of an attorney to draft a codicil (for a will) or amendment (for a living trust) or to write a new will or living trust.

Although these are generally revocable documents, by informing us of your intentions, you can be recognized as a Society member for the full amount. Sample bequest language: I hereby give, devise and bequeath to the Intrepid Fallen Heroes Fund, at 46th Street and 12th Avenue, New York, NY, $_____ (specific dollar amount) or _____ percent of my residuary estate, to be used for general purposes or to support _______ (a specific project).

Stock/Securities

The following are the wiring instructions for donated stock:

LPL Financial – DTC# 0075

For Further Credit to LPL Account #58071180

For Further Credit To: Intrepid Fallen Heroes Fund

Should there be any questions concerning the above, please contact LPL Financial at 1-800-877-7210 or 1-858-450-9606 ext. 5348. After transfer is made, please contact Tom Alletto at talletto@fallenheroesfund.org or phone (646) 381-5130 and confirm the following:

1. The name of the each security being donated
2. The quantity of each security being donated

IRA or Pension Plan Beneficiary

When you name the Intrepid Fallen Heroes Fund as a beneficiary of your IRA, pension plan or other retirement assets, you are creating a revocable commitment to the Fund. This is a form of planned giving, as funds designated are not subject to income tax after your passing. While estate taxes may or may not be a concern for you, all IRA, pension plan and pre-tax retirement assets are subject to income tax when distributed unless a nonprofit institution, such as the Intrepid Fallen Heroes Fund is named as a beneficiary of a part or all of your funds. Changing a beneficiary designation requires filing a new beneficiary designation form. You can be recognized as a Heritage for Heroes Society member by simply informing us of your intentions.

Life Insurance Policy

Insurance policies that are fully paid are ideal assets to gift the Intrepid Fallen Heroes Fund. Then again, you can purchase a new insurance policy that names the Intrepid Fallen Heroes Fund as the owner by pledging to make annual gifts to cover paying the premiums. We will work with you and your financial advisor to determine the best policy to use for this purpose.

 

BEQUESTS AND ESTATE PLAN GIFTS

You may make a bequest or gift through your estate by including a provision in your Will or living trust, or by naming the Intrepid Fallen Heroes Fund as a beneficiary of a retirement plan or life insurance policy. The amount left can be expressed as a dollar amount or as a percentage of the assets to be given.

Give without affecting your cash flow during your lifetime.

Name the Intrepid Fallen Heroes Fund as the beneficiary of an Insurance Policy, IRA, Stocks or Mutual Funds

One particularly tax-efficient way to make a bequest is to donate part or all of your regular individual retirement account to charity by designating a charity as a beneficiary.

Bequeathing an IRA to charity can save your heirs income taxes that they otherwise might owe on an IRA’s required minimum distributions, as well as reducing the size of your estate. (Rules governing IRAs, which aren’t passed on through wills, is complicated and requires tax counsel before bequeathing such an account.)

CHARITABLE BEQUEST:

A bequest is a gift that can be made as a percentage of your estate. You can make a specific bequest by giving a certain amount of cash, securities or property. After your lifetime, the Fund receives your gift.  If your estate is subject to estate tax, your gift is entitled to an estate tax charitable deduction for the gift’s full value.

General bequest language

“I give, devise, and bequeath to NAME OF CHARITY/LOCATION, the sum of $________(or a description of the specific asset), for the benefit of NAME OF CHARITY and its general purposes.”

Residuary Bequests are made when you intend to leave the residue portion of your assets after other terms of the will have been satisfied.

Residuary bequest language

“All the rest, residue, and remainder of my estate, both real and personal, I give to NAME OF CHARITY/LOCATION, for its general purposes.”

Contingency Bequests allow you to leave a portion of your estate to a particular charity if your named beneficiary does not survive you.

Contingency bequest language

“I devise and bequeath the residue of the property, real and personal and wherever situated, owned by me at my death, to (name of beneficiary), if (she/he) survives me. If (name of beneficiary) does not survive me, I devise and bequeath my residuary estate to NAME OF CHARITY/LOCATION, for its general purposes.”

ENDOWED GIFTS

An annual distribution is made for the purpose you designate.

Contingency Bequests allow you to leave a portion of your estate to a particular charity if your named beneficiary does not survive you.

Contingency bequest language

“I devise and bequeath the residue of the property, real and personal and wherever situated, owned by me at my death, to (name of beneficiary), if (she/he) survives me. If (name of beneficiary) does not survive me, I devise and bequeath my residuary estate to NAME OF CHARITY/LOCATION, for its general purposes.”

I have children and relatives. Shouldn’t I leave my entire estate to them?

This is perhaps the number one cause for reluctance when making a bequest. The truth is that, depending on the current tax laws, leaving a gift to charity in your will may reduce the estate tax burden on your heirs significantly. You should consult with a financial advisor or attorney to learn how giving may actually benefit your family after you’re gone.

If you have a large holding of savings bonds, you can spare your heirs the income tax on the interest while providing them with income by setting up a charitable remainder trust. As of 2012, the IRS allows you in your will to name the trust as the bonds’ owner when you die. This type of trust is tax-exempt, so the trustee can redeem your bonds without paying the tax and reinvest all the proceeds. The trust pays your heirs a percentage of the trust’s assets each year, typically 5 percent, for a set term of years or the heirs’ lifetime. Your heirs must pay income tax on the trust’s payments. When the payment term expires or the last of your heirs die, the proceeds remaining in the trust go to the charity you selected when you established the trust.

Charitable Remainder Trust (CRT)

A CRT lets you convert a highly appreciated asset (like stocks or investment real estate) into a lifetime income without paying capital gains tax when the asset is sold. It also reduces your income and estate taxes, and lets you benefit a charity that has special meaning to you. With a CRT, you transfer the asset to an irrevocable trust. This removes it from your estate. You also get an immediate charitable income tax deduction.

The trust then sells the asset at market value, paying no capital gains tax, and reinvests in income-producing assets. For the rest of your life, the trust pays you an income. Since the principal has not been reduced by capital gains tax, you can receive more income over your lifetime than if you had sold the asset yourself. After you die, the trust assets go to the charity you have chosen.

Charitable Lead Trust (CLT)

A CLT is just about the opposite of a CRT. You transfer an asset to the trust, which reduces the size of your estate and saves estate taxes. But instead of paying the income to you, the trust pays it to a charity for a set number of years or until you die. After the trust ends, the trust assets will go to your spouse, children or other beneficiaries.

BONDS

You can leave your savings bonds to your favorite charity in your will. By doing so, your estate and your heirs will avoid taxes on the interest. To do this, you write a provision in your will that the savings bonds belong to the charitable organization when you die. Your estate administrator distributes the bonds to the charity for redemption. The bonds never count as part of your estate so there is no tax liability for your heirs. The charity reports the interest when it redeems the bonds, but because charities are tax-exempt there will be no tax due.

You will need to provide your legal counsel with the NAME of the Organization- and IRS Federal id number:

The name – Intrepid Fallen Heroes Fund
The Intrepid Fallen Heroes Fund Tax ID Number: 20-0366717

UNRESTRICTED EXPENDABLE BEQUEST
I hereby give (Name of Gift) to the Intrepid Fallen Heroes Fund, a nonprofit institution, to support the needs of our military personnel.

UNRESTRICTED ENDOWED BEQUEST
I hereby give (Name of Gift) to the Intrepid Fallen Heroes Fund (herein, “the Fund”), a nonprofit institution. The property comprising this gift may, for investment purposes, be merged with any of the investment assets of the Intrepid Fallen Heroes Fund, but the gift shall be entered in the organization’s books and records as an endowed fund known as THE FUND. The Board shall use the endowment payout from the Fund to support the objects and purposes of the organization.

*Fill in the blank with the dollar amount, percentage of estate, or specific property you intend to give to IFHF.

Please note: To restrict your gift to a specific purpose, please see additional language on our website or contact the Development Office for assistance.

We are happy to help you explore options for designating a bequest to the Intrepid Fallen Heroes Fund and can provide sample language for the provision for the Fund. To learn more, please contact us or visit our website, www.fallenheroesfund.or/plannedgiving.fallenheroesfund.org

Those considering a planned gift should consult their own legal and tax advisors. The Development Office is happy to speak with advisors as well.

THANK YOU! If you have included the Intrepid Fallen Heroes Fund in your estate plans, please let us know. We would like to thank you for your generosity, assure the purpose of your gift is understood by the organization, and recognize you as a member of the Heritage for Heroes Society. To learn more about the Society or Planned Giving, please contact the Development Office.

For more information or to get help making a planned gift, please contact the Intrepid Fallen Heroes Fund Development Office at 646-275-0086.

 

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