Planned and Deferred Gifts
Incorporating charitable gifts into your financial and estate plans can have tremendous benefits for both you and your favorite charities, both now and in the future. For types of gifts anyone can make Click Here
There are a number of different gifting methods that can be used to maximize your giving power, while also providing for yourself and your heirs:
A bequest is perhaps the most popular and simplest type of planned gift. Through your will, you may donate any type of asset (cash, stock, real estate, etc.) or a specific amount, percentage or residual of your estate. Most people have heard the phrase, "Last Will and Testament," and understand that it outlines a person's wishes for the distribution of his or her assets. But, a Last Will and Testament is not merely a set of instructions; it is an expression of your "will" to provide for loved ones, to support the work of charitable organizations, and to leave a personal legacy.
A planned gift can be structured so that you retain the right to lifetime income. With such "life income" gifts, you benefit now and California Hospital Medical Center Foundation benefits later, after you have realized all of the financial and tax advantages. Trusts can be funded with appreciated property including real estate and securities.
The Charitable Remainder Trust provides income to you and/or your beneficiaries for life or a period of years, with the remainder of the gift going to charity. This type of gift may also offer several benefits including:
- Sizable charitable income tax deduction
- Reduction of capital gains tax liability
- Increase in spendable income
- Potential reduction of estate taxes
You might also consider a Charitable Lead Trust, which is a way of making a "temporary gift" of income to CHMC and eventually passing the trust assets to your heirs with significant estate tax savings.
Under one type of lead trust arrangement, the annual income from the trust is paid to California Hospital Medical Center Foundation for a specific number of years. When the trust terminates, the principal then passes to your heirs (e.g., your children or grandchildren). The value of the interest paid to charity during the term of the trust is tax-deductible for gift and estate tax purposes. The Charitable Lead Trust is often used to make a campaign gift to charity, while ensuring that family members ultimately receive the property or assets with a minimum of taxation.
Charitable Gift Annuities
A Charitable Gift Annuity is a contract between you and California Hospital Medical Center Foundation. In exchange for a donation, the Foundation agrees to pay you (the annuitant) a guaranteed income for life. You may also name up to one additional beneficiary to receive annuity payments. The amount of the annuity is based on the age(s) of the annuitant(s) and the amount of the gift.
A Charitable Gift Annuity may be funded with a minimum of $10,000 (typically cash or securities) and may provide a number of attractive benefits including:
- Income tax deduction for approximately half of the gift value
- Partial tax-free income
- Increase in spendable income
The Charitable Gift Annuity is flexible enough to meet the objectives of almost any financial plan. For donors who are 65 years of age or older, a Charitable Gift Annuity may provide fixed payments larger than the returns from money market funds, CDs or stock dividends. Middle-aged donors may consider a deferred gift annuity. Under this arrangement, you would receive your income tax deduction now (during your high-income years) and postpone your annuity payments until a later date (e.g., after retirement) when you may be in a lower tax bracket.
Do you have a life insurance policy that you no longer need for the security of yourself or your family? By giving the policy to California Hospital Medical Center Foundation (by making us the owner and/or beneficiary), you can ensure a substantial future gift for the hospital's charitable programs. Once ownership is transferred, any future premium payments are tax-deductible within certain limits.
Retirement account assets (from an IRA, 401k, or other vehicle) can be used to benefit charity while maximizing the amount left to your heirs. Because retirement assets may be subject to significant taxation if you leave them to your heirs, it often makes good financial sense to use these assets to fund your charitable giving instead. This allows you to leave other assets to your family members.
For More Information
CHMC Foundation suggests that you always consult your personal financial advisor before making any significant gift.
If you would like to see how a planned gift might help you and your family to achieve your retirement and philanthropic goals, we can provide you with information and illustrations to share with your advisor. To schedule a free, confidential, no obligation consultation, or to receive free information via mail, please contact the Foundation office at 213.742.5662.