The ABCs of Planned Gifts

A planned gift, as its name suggests, requires planning, and that planning is usually tax planning. The term includes several types of gifts, one of which is the donation of an asset in exchange for an income, usually provided after the asset is put into a charitable trust. At some point, not necessarily immediately, a charitable organization, like your favorite charitable organizations, receives the asset. In other words, the donor parts with the asset today to receive the income and tax benefits, while the actual gift of the asset to charitable nonprofits is deferred for a period of time, often the lifetime of the donor.

Planned Gifts That Pay
In the context we have established here, a planned gift can include a "life income gift" because you receive an income from the donated assets, in many cases for the rest of your life. There are four types of life income gifts:

• Charitable Remainder Annuity Trust
  You place assets into a trust (usually a minimum of $100,000) from which you receive a life income at a fixed amount. After your lifetime, and the lifetime of a surviving beneficiary, if desired, the trust remainder goes to charitable nonprofits.
• Charitable Remainder Unitrust
  This works like an annuity trust, except that the income you receive varies each year based on a set percentage of the value of the trust assets, redetermined each year.
• Pooled Income Fund
  A trust established by our organization, which acts much like a mutual fund. The donor makes contributions to the fund in return for income. At the end of the term, the value of the donor's share is transferred to charitable nonprofits.
• Charitable Gift Annuity
  You transfer assets to us, often a minimum of $5,000 or $10,000, which in return pays an annuity to you or a beneficiary for the life of one or two beneficiaries.

Consult the Experts
The use of planned giving techniques has grown dramatically over the past 20 years, benefiting thousands of charitable organizations, such as your favorite charitable organizations. Each type of planned gift carries its own complexities, which are best negotiated by an experienced professional.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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