Below are some personal stories depicting examples of various planned giving vehicles. Please contact Lior Spring at lior.spring@jcajax.org or 904-730-2100 ext. 318 to learn more about ways to leave your legacy at the Jewish Community Alliance.
Case: Bequest
We recently received a wonderful gift from a donor’s estate. It is a magnificent legacy for the donor and for us and will have a vast impact on our mission! The sadness is that we didn’t know it was coming and I didn’t get to say, “thank you” as we sincerely want to do. Please let us know if you have a bequest for the JCA in your will. We promise only to thank you as warmly as possible for your thoughtfulness.
CASE: IRA Rollover
David, age 75, has accumulated $700,000 in his IRA accounts. He is required to take distributions from his IRA. He has other sources of wealth and he plans to leave a large estate to his heirs and has been discussing $200,000 gift of appreciated stock to your major gift campaign.
You suggest that David would be able to greatly increase the impact of his gift by using the $100,000 annual IRA Charitable Rollover and make a combined gift of $300,000
CASE: Life Insurance
Donna Donor is 60 years old, has established moderate wealth in her shipping company and appreciated stock. She has committed to a $100,000 gift of stock to your major gift campaign.
Donna has told you she has two fully funded whole life insurance policies, $25,000 each, on her two children who now have families of their own and will be heirs to her estate along with your organization.
You suggest that she may maximize her gift by gifting the ownership of her two policies to your organization for a total gift of $150,000
You suggest that he may maximize his gift by gifting the ownership of his two policies to your organization for a total gift of $150,000
CASE: Bargain Sale
Donna Donor is 75 and lives in the same house she and her husband have lived in for 40 years – a very nice 3,200 sq. home, with pool on a double lot purchased in 1977 for $150,000. But, the property is surrounded on three sides by a large hospital as the hospital has grown over time and has bought up adjacent lots. Donna was a nurse and her husband was physician at the hospital for 30 years. After she retired she has volunteered at the hospital and it is her and her husband’s primary philanthropy. Their current estate is valued at $20m.
Donna is considering moving to the hospitals new retirement community built on the opposite side of the hospital from her house. The current value of the home is $1m. Donna has approached the hospital regarding the purchase of her house.
After consideration from her estate planner and the hospital foundation she would like to sell the hospital her home for $300,000 – gifting the remaining value of $700,000 through a bargain sale, her cost basis is $150,000.
Applying the bargain sale rules, the $300,000 received may be entirely tax free by applying the section 121 exclusion (up to $500,000 of capital gain)
Case: Charitable Gift Annuity
Tom and Mary are 75 years old and have been members of the JCA since 1991 and they have both received so much from the JCA that they would like to support it with a gift, however, they are a little concerned about their retirement finances and their current fixed budget. After speaking with Lior Spring they understand that they may make a gift of appreciated securities and guarantee a lifetime income from a two – life charitable gift annuity. Lior went on to explain that they will receive a charitable income tax deduction, avoid some capital gains tax and portion of the life time CGA payments will be tax free. This type of planned gift is perfect for Tom and Mary as the may make a gift while enjoying a life income.
The charitable gift annuity is a contract between Charity and the donor. Charity agrees to pay the donor and/or one other person named by the donor a lifetime annuity in return for a gift of cash, securities, or other property. The payment may continue for the life of a second individual, such as a spouse. The annual payment is a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries.
Rates of return under a charitable gift annuity are lower than the rates offered by commercial insurance companies so that a significant residuum will remain for Charity. Written notice of this fact will be documented for the donor in two documents. First, the donor will be notified in writing during the gift negotiation stage. Second, the gift annuity contract cover letter will also contain this information for the donor
CASE: Charitable Remainder Annuity Trust – CRAT
David Donor, age 75, purchased stock in a shipping company in 1990 at a cost basis of $50,000. Today the stock is worth $1,000,000 but does not pay very good dividends. David would like to support Foundation A with a gift and he would like to avoid the large capital gains tax (@$360,000). David has a number of retirement assets and owns his home and a vacation property. He is concerned that he will be able to live off of his other assets and would like to secure another income for life and his investment strategies are very conservative.
CASE: CLT
Donna Donor, age 75, a local businesswoman, has committed to your major gift campaign by pledging a gift of $50,000 over a five-year period ($250,000). She has discussed making a gift of cash to satisfy the pledge. Through your conversations she has mentioned that one of her assets that troubles her is a stock account valued at $1 m. She built this account 20 years ago to be passed on to her heirs. Because her business has been so successful she is concerned about a large estate tax.
You suggest funding a CLT which will remove the assets from her estate for estate taxation purposes, fund her pledge for 5 years, (future charitable designations for the life of the trust) and then upon her demise the CLT will be designated to her heirs, often with significant tax savings.