Planned Giving
by Bill Altavilla, Planned Giving Consultant, SCC Foundation of Los Rios Foundation
One popular estate planning technique is planned giving. Making a donation to the Sacramento City College Foundation provides some very attractive benefits. You could receive an immediate income tax deduction and an income for life. With a properly structured gift, you could realign your investment portfolio without paying capital gains tax on appreciated property. Another strategy may allow you to pass your estate on to your children while avoiding both probate and estate taxes.
To whom should I give?
The vast majority of donations are made to charitable organizations with which an individual, couple or family have a commitment or a relationship. To qualify, a charitable organization must have been organized in the United States, be operated on a strictly non-profit basis, and not be politically active. Sacramento City College Foundation is one of those organizations.
What can you give?
You can contribute almost anything to a qualified organization. The deduction limits are more restrictive for gifts other than cash, but you are free to give almost any property of value.
What are the gifting strategies?
In addition to making an outright donation, there are a umber of different gifting techniques you can use. You can give life insurance. This enables you to give a large future gift at a relatively modest cost. A charitable gift annuity and the charitable remainder trust allow you to retain an income interest in a future gift. This allows you to receive income from the gift for the remainder of your life. With a charitable lead trust, you can give the income to the charitable organization and retain the principal for your heirs.
What are the benefits?
Making a planned gift can provide some significant benefits. A charitable contribution may qualify you to receive a significant current income tax deduction. Your deduction for an outright gift will equal the value of your gift up to certain generous limits. You can carry forward any gift amount that exceeds these limits for up to five year.s With the use of a charitable gift annuity, you are guaranteed a specific income for life or the term of the annuity agreement. Cash and highly appreciated securities can be donated, avoiding capital gains tax on the transfer of the securities. By using a charitable remainder trust, the trustee can sell highly appreciated gifted investments and reinvest the proceeds to generate income without paying capital gains tax. Thus, a properly planned gift could enable you to realign your investment portfolio without incurring any current income taxes. That could allow you to diversity your holdings and even increase your cash flow. With a charitable lead trust, you can pass an appreciated asset onto your heirs with little or no estate taxes.
Whatever gifting strategy you choose, planned giving can be very rewarding. It's wonderful to see your gift at work and to receive tax benefits as well.
The information provided herein is to assist you in planning for your future. Any analysis is a result of the information you have provided. Proper tax and legal advice should always be obtained.
Bill Altavilla specializes in planned giving to benefit donors and charitable organizations. He has been in the planning and analysis field for over 20 years. He currently serves as a planned giving consultant to the Los Rios Foundation, and auxiliary foundations in the Los Rios Community College District, which include American River, Cosumnes River, Folsom Lake and Sacramento City College Foundations.
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