Gifts That Cost Nothing Now
Gift in a Will
Donors pay a profound complement to the College of Charleston Foundation by naming it to receive a gift through their wills. The advantage of a gift in a will is that it costs nothing now and it can be changed at any time. It is a simple process but it does require the assistance of an attorney. Please see the sample wording below, which may be helpful.
I give to the College of Charleston Foundation (the sum of $_______) (____percent of my estate) for the benefit of the College of Charleston. This gift shall be handled according to instructions that may be on record with the College of Charleston Foundation. If there are no instructions on file, then the gift shall be used for __________________________________.
Retirement Plan Assets
A gift of retirement plan assets is both easy and tax-efficient. When naming the College of Charleston Foundation as a beneficiary of a retirement plan such as a 401(k), IRA, 403(b), etc., there are two choices to make:
- Will the College of Charleston Foundation be named as a primary beneficiary or as a secondary beneficiary?
- What percentage of the plan is designated for the College of Charleston Foundation: 1% to 100%
Retirement plan beneficiary designations may be changed at any time.
This is very easy to accomplish: either contact your investment manager OR, log in to your retirement account and change the beneficiary and percentage gift online.
Existing, Paid-Up Life Insurance Policies
It is possible to make a gift of an existing paid up policy by transferring the ownership to the College of Charleston Foundation.
Employer Provided or Board Sponsored Life Insurance
Some donors have chosen to name the College of Charleston Foundation as the beneficiary of life insurance policies that have been provided by their employers or as a benefit for service on a board.
Gifts that Pay Income
Charitable Gift Annuity
A gift annuity is a simple contract. The donor makes a gift to the Foundation. In return for the gift, the Foundation promises to pay a fixed dollar amount to the donor, and if applicable, the donor’s spouse, for life. The gift property may be cash or stock. The payout rates are determined by the age(s) of the donor and if applicable, the donor’s spouse. Following are the types of annuities available:
- Current payment (starts immediately)
- Deferred payment (starts more than one year from the day of the gift)
- Deferred flexible payment (starts upon request of the donor after one year)
Charitable Remainder Trust
A charitable remainder trust is similar to a charitable gift annuity. The donor makes a gift into a charitable trust created by the donor’s attorney. The donor decides who receives income from the trust and for how long. When the trust terminates, the remainder is distributed to one or more charities named by the donor. Charitable remainder trusts are frequently funded with highly appreciated assets because of the tax benefits.
Charitable remainder trusts are useful tools with many, many application. Donors should utilize experienced legal advisors when creating a charitable remainder trust to explore their creative uses as well as the legal and tax ramifications.
Gifts that Protect or Preserve Assets
Gift of Home or Farm with a Retained Life Estate
It is possible to make a gift of one’s home while keeping the right to live in it for life. The donor receives an immediate income tax deduction and continues to occupy and maintain the house. When the donor passes away, the house becomes the property of the charity.
Charitable Lead Trust
In this type of arrangement, a donor makes a gift into a trust. The income payments are made to a charity, such as the College of Charleston Foundation, for a certain designated period of time. At the end of the chosen period, the trust principal passes to either 1) the donor, or 2) to certain other designated individuals, usually family. This trust is quite useful in transferring wealth to successive generations but it is not tax exempt. Knowledgeable legal counsel is critical in establishing a charitable lead trust.
Donors may give new or existing policies to the College of Charleston Foundation. The Foundation typically becomes the owner and beneficiary of the policies. If the Foundation is the owner of the policy, the donor may make tax gifts to the Foundation for the purpose of paying the premiums.
The College of Charleston Foundation does not offer tax or legal advice. However, we will work with your personal tax advisors to determine your best charitable options.