A good advisor can walk clients through the pros and cons of each type of charitable giving plan and give advice about which assets to use for philanthropy. Community Foundation of Hazard & Perry County receives gifts from:
Not only does a gift to charity remove the asset from the donor's taxable estate, but it is also the ultimate statement of values. It reminds loved ones, heirs, and the community of where the donor found passion and merit. Charitable bequests add meaning to our lives both now and forever. Bequests to Community Foundation of Hazard & Perry County can add to an existing fund or establish a new fund. The fund can be anonymous or named. It can make grants in a wide area of need that interests the donor, or it can benefit designated charities and churches, which will receive a grant each year in perpetuity. Wills can also provide scholarship funds.
A charitable remainder trust is a gift plan defined by federal tax law that allows a donor to provide income to himself or herself and/or others while making a generous gift to charity. The income may continue for the lifetimes of the beneficiaries, a fixed term of not more than 20 years, or a combination of the two.
A non-grantor charitable lead trust is a gift plan defined by federal tax law that allows an individual to transfer assets to family members at reduced tax cost while making a generous gift to Community Foundation of Hazard & Perry County.
Life insurance may be given to the Foundation and the cash value deducted from income tax. However, the Foundation can also be named as a beneficiary on life insurance policies. Donors may wish to establish a fund at the Foundation by naming Community Foundation of Hazard and Perry County as a sole beneficiary, a contingent beneficiary, or a beneficiary of a fixed percentage of the policy.
This gift can be ideal for a donor whose home represents a major portion of his or her net worth. A life estate contract can allow a donor to remain at home and also provide a substantial gift to charitable causes. The donor gifts the home to the Foundation but retains the right to live there for life. This gift creates an up-front charitable deduction for the remainder value of the property, removes the property from the donor's taxable estate, and relieves heirs of the burden of selling the property. As with the charitable remainder trust, donors can use a portion of tax savings to purchase life insurance to replace the value of the home or farm for the heirs.
Lifetime gifts of these types of assets are encumbered with IRD - income in respect of a decedent. This simply means that the donor did not pay income tax on the growth of the asset during life, and upon death the taxes must be paid. These assets are poor bequests to children, because the heirs (except spouses) are taxed heavily on them. However, they are a great tool for charitable bequests.
Community Foundation of Hazard & Perry County does not pay income tax; a gift of tax deferred retirement assets on bonds come to the Foundation tax-free.
606.439.1357
Community Foundation of Hazard & Perry County
P.O. Box 310 • Chavies, KY 41727 • info@commfoundation.org
