Planned Giving Basics: What Is a “Planned” Gift?
Planned giving is a term commonly used to describe a wide variety of donation options that allow you to contribute to OMSC during your lifetime, or after your death, while at the same time addressing your current income needs and/or your desire to provide for your heirs. Planned gifts are usually contemplated by donors when they draw up their estate plans. However, the process of amending these arrangements at a later date to include charitable giving is a relatively uncomplicated one.
From a donor perspective, planned giving is attractive for many reasons. Certain planned giving vehicles generate income for defined periods or for life, offer higher yields than commercial investments, and result in reduced capital gain and estate taxes. Planned gifts are a viable option for those donors who are uncertain how much of their assets they will need to support themselves and their families during their lifetimes, especially during retirement years.
The most common types of planned gifts are bequests, life insurance policy designations, gifts of retirement fund assets, Charitable Remainder and Charitable Lead Trusts, and Charitable Gift Annuity agreements. Other planned gifts that OMSC may consider include donations of real estate, automobiles, art, or other valuable personal property.
Planned gifts may be revocable or irrevocable in nature, ensuring that the original wishes and intentions of the gift are honored by OMSC at the time when the assets used to fund the gift are transferred to the center.
Whether you choose to provide funding for a named scholarship, our Artist in Residence program, capital improvements, or scholarly publications, your planned gift will be put to good use endowing future operational costs and ensuring that the mission of the Overseas Ministries Study Center will continue for generations to come.
What Are My Planned Giving Options?
Revocable Planned Gifts
If you want to provide a future benefit to OMSC but would like to keep control of your assets in case of an emergency, you might wish to consider a revocable planned gift. In choosing a testamentary gift (will/trust), you will retain lifetime control over the intent and purpose of your philanthropy, ensuring that your gift is properly stewarded by OMSC.
Revocable planned gifts are an ideal option for those donors who have provided for their heirs and are looking to leave a legacy gift to OMSC. In using your estate to make a charitable gift, you will ultimately reduce or eliminate the rate of state, federal, and estate taxes paid on these assets.
Charitable Bequests
The term "charitable bequest" is used to describe any assets that you leave OMSC from your estate through your will or a trust. You can arrange to bequeath a gift from your estate in several different ways. You can set aside a specific dollar amount, leave a percentage of your estate, or donate any assets left over after your family has been provided for. At the time of your death, the value of the assets you designate to OMSC will be eliminated from your taxable estate.
Life Insurance Policy Designation
By designating OMSC as either the primary or a contingent beneficiary of your life insurance policy, you can enjoy some flexibility in your charitable giving as well as qualify for certain tax breaks. While a gift of life insurance will not produce income tax deductions for past or future premium payments, it does qualify you for a full estate tax deduction upon your death.
401(k) Plans and Retirement Funds
It is often a good idea to use assets in your qualified retirement plan when making charitable bequests since OMSC is exempt from paying income taxes on these gifts. Leaving these same assets in your estate, or bequeathing them to a family member or a loved one, will result in the recipient's paying state and federal taxes in addition to any estate taxes that might be due.
Gifts of Real Estate
You can use real estate to fund a life income gift, or you can leave real estate to OMSC through your will or living trust. And if you want to receive a current income tax deduction for the gift of your home, but would like to continue living there for the rest of your life, you can donate a "remainder interest" in your home and retain a “life estate” for yourself.
Irrevocable Life Income Planned Gifts
If you are in the financial position to make a donation of your current assets, but would also like to benefit from a regular income stream for a set period or for life, a life income gift plan might be perfect for you.
With a life income gift, not only will you receive a regular income stream, but you will also be eligible for a current income tax deduction, the elimination of the assets given from your taxable estate, and the reduction or elimination of capital gains taxes on any appreciated assets used to fund the gift.
Charitable Remainder Trust (CRT)
A CRT provides regular payments to you and/or the other beneficiaries you designate for life or for a selected term of years. A CRT offers more flexibility than a Charitable Gift Annuity (CGA) by allowing you to identify multiple beneficiaries and choose the manner in which your annual payment will be calculated. The remainder is then put to use by OMSC as you choose.
Charitable Lead Trust (CLT)
In contrast to life income gifts that provide you with a current payment stream and OMSC with future funding, a CLT provides a current payment stream to OMSC and a remainder interest to you or a designated beneficiary.
The benefits of a CLT include a current income tax deduction, removal of the contributed assets from your taxable estate, and the ability to transfer assets to your family free of inheritance taxes, all while funding the present needs of OMSC.
Charitable Gift Annuity (CGA)
A CGA is a simple contract with OMSC that pays you and/or your designated beneficiary a fixed return for a set period or for life. At the end of the contract term, the remainder (usually 50% of the corpus) will be distributed to OMSC to be used for the purposes that you designate.
Real Property
On a case-by-case basis, OMSC will consider contributions of valuable art, automobiles, collectables, or other real property. Before making plans to leave these assets to OMSC, kindly contact the center to inquire about our interest and the value of the items in question. A sub-committee of the Board of Trustees will be the ultimate arbiter of the acceptance of these gifts.
Endowed Fund
An endowment at OMSC is defined as a fund that is restricted for specific purposes such as scholarships, programs, research, scholarly publications, or capital improvements. Donors, however, may opt to establish endowments that benefit the general welfare of OMSC as defined by the Board of Trustees.
Funds for endowments are invested on an individual basis, designed to produce growth and income to ensure that the present and future needs of the targeted purpose are met. Only the interest generated from the fund can be spent, not the principal that establishes the endowment. A portion of the interest or earnings from the endowment (usually 5%) is spent on an annual basis, and the rest is reinvested to ensure the long-term viability of the fund.
Whom Do I Contact?
For more information about how a planned gift might fit into your overall giving
to OMSC as well as your financial plans, please contact:
Dr. Jonathan J. Bonk
Executive Director
Overseas Ministries Study Center
490 Prospect Street
New Haven, CT 06511
(203) 285-1561
bonk@omsc.org
Disclaimer
OMSC does not provide legal or tax advice. We recommend that you seek your own legal and tax advice in connection with gift planning matters. To ensure compliance with certain Internal Revenue Service (IRS) requirements, we disclose to you that this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties. |
.jpg)
.jpg)
.jpg)
.jpg)
.jpg)