Bequests are gifts made through your will. They can be made in the form of a specific gift of cash or property, a general sum of money, or a percentage of the remainder of an estate or trust and they are distributed at your death. The full amount of your bequest is usually deductible for estate tax purposes.
Charitable Lead Trusts
A Charitable Lead Trust (CLT) is created by a transfer of assets to a trust that will pay One Hundred Miles income for a term of years. At the end of the term, you or a beneficiary receives the remaining trust assets. A CLT can be created during life or at death, under the terms of your will. The tax advantage is that it removes assets from your estate and minimizes your estate and gift taxes.
Charitable Remainder Trusts
A Charitable Remainder Trust is created by a transfer of assets to a trust that will pay you or another beneficiary income for life or for a period of years. At the death of the last beneficiary, the remaining property in the trust passes to One Hundred Miles. There are two basic kinds of CRTs:
- Annuity Trust – provides beneficiary(s) a fixed dollar income and is determined when gift is made.
- Unitrust – provides beneficiary(s) a fixed percentage of the fair market value of the trust assets, recalculated annually or at some other fixed period.
- Receive an immediate charitable income tax deduction.
- Tax-free Diversification of the assets – the trust pays no capital gains tax on the sale of trust assets
- The entire value of the trust at your death is excluded from your estate and is not taxed.
Life Insurance Policies
By making small payments each year into your policy for a number of years, you can leave a bequest of sizable proportions to One Hundred Miles. Upon the death of the insured, the policy proceeds going to OHM will be an estate tax charitable deduction. There are two ways to ways to give a gift of a life insurance policy:
- Gift of existing policy: One Hundred Miles becomes the owner and beneficiary. You get an immediate charitable income tax deduction for the lesser of current cash value or premiums paid. Any future premiums you pay are deductible as contributions.
- Name One Hundred Miles as a beneficiary of a new or existing policy: You keep control of the policy while naming OHM as a full or partial beneficiary. For this gift, you are entitled to a charitable deduction for the value of the initial premium and you will receive additional deductions when you make later premium payments.
Retirement Plans are one of the best assets to own during your life, but the worst asset to own at death. At death, retirement plan assets are subject to income and estate taxes and their value can be reduced by as much as 75%. Naming One Hundred Miles as beneficiary of funds in your retirement plan is an easy way to reduce the size of the taxable assets and avoid subjecting the estate or beneficiary to income taxation at your death. The IRA Charitable Rollover also provides an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.
“By including One Hundred Miles in your will or estate plan, you’ll be helping to protect the coast you love for generations to come.”
Contact Kate to discuss the options that are best for you and your family.