PERSONALIZING YOUR GIFTS
Donors can make contributions to the Foundation using various financial instruments. It can be as simple as writing a check or making a planned gift that preserves wealth.
Donors can choose to guide their giving through several fund types with various levels of involvement in grant making.
The Community Foundation offers you various ways to achieve your charitable and financial goals.
Personalizing Your Gifts
The Elk County Community Foundation can work with you to determine the type of gift that best suits your personal needs. Some gifts go to work immediately, while others provide that assets will be available in the future. Some gifts provide immediate tax benefits while others shelter estates from taxes and help preserve wealth for heirs.
When you write a check, donate stock, or give real estate to your Community Foundation, the gift goes to work in the community immediately. Such a gift can also be made after death through a bequest in a will.
Donors may deduct an outright cash gift from their federal tax returns - up to 50% of adjusted gross income in one year. Any excess may be carried forward for up to five additional years.
Donors of long term appreciated property - securities or real estate - receive full fair market value income tax deduction up to 30% of adjusted gross income, with excess carried forward for 5 additional years. Donors also pay no tax on capital gains.
For gifts of personal property, such as art work or coin collections, the deduction may be either for full market value or the cost basis depending if the Foundation uses the property or sells it.
Is there a substantial balance in your IRA, 401(k) or other retirement account? If so, these funds may be taxed at the rate of 70% of more after your death and the death of your spouse. Unfortunately, this will substantially reduce your legacy to your heirs. Here's how the Elk County Community Foundation can help.
Estate and income taxes on the value of the retirement funds can be avoided by naming the ECCF as the remainder beneficiary. This makes retirement fund assets ideal as a way of supporting your local chartable interests.
A life insurance policy is an ideal tool for charitable giving to the Elk County Community Foundation. It is a convenient and effective way for donors to make a much larger gift than they had thought possible.
Life insurance policies can be gifted to the Community Foundation in several ways:
Name the Elk County Community Foundation as a Beneficiary.
This can be a good option for donors whose beneficiaries have preceded them in death, or whose beneficiaries are covered by other life insurance policies. Donors receive an estate tax deduction for the donated proceeds of the policy, but no tax benefit during their lifetimes, since the gift is revocable.
Donate a policy that has been paid up.
When a donor names the Elk County Community Foundation as a beneficiary and also transfers ownership of the policy, the gift becomes irrevocable. The donors receive an immediate income tax deduction.
Donate a new policy or a partially paid policy.
The donor receives a deduction approximately equal to the policy's current value and would also receive deductions for continued premium payments. This makes a new policy a very economical way to make a large future gift to the Elk County Community Foundation.
Charitable Lead Trusts
One of the more valuable planning strategies available for use by donors who wish to give to charity and who are also concerned with ultimately benefiting family members is the Charitable Lead Trust.
This trust is designed to provide the charity with a specific amount of income for a specific period of time. At the end of the trust term, individual beneficiaries are to receive a remainder interest. The principal is returned to either the donor or heirs at greatly reduced estate and gift tax rates.
The Lead Trust may be either in the form of a living trust or a testamentary trust. It is most valuable to donors as a living trust. It is also most beneficial for donors and their families when there is no immediate need for more income than they currently enjoy and where they are able to forego current income for the prospect of long term capital appreciation.
The gift of a Charitable Lead Trust enables donors to achieve a number of philanthropic and estate planning goals:
You can make a significant gift that goes to work right away
You keep control of the trust assets within the family.
A trust can be established through a donor's will, encouraging heirs to continue the family's philanthropic work.
Thanks to tools like the Charitable Lead Trust, it is possible for you to make a charitable gift that will help the Elk County Community Foundation. At the same time you enjoy the prospect of long-term capital appreciation or the opportunity of leaving an inheritance to your loved ones.
Greatly Reduced Estate and Gift Taxes
Thanks to plans like Charitable Lead Trusts you don't have to choose between making a charitable gift and leaving your loved ones an inheritance. It may be possible for you to do both.
At the end of the trust any growth in principal passes tax-free to heirs without being subject to gift or estate tax.
Donors can carry out their charitable purposes and commitments over a period of years with monies that might otherwise go largely for taxes
You are able to fund the trust with property that has strong appreciation potential and to pass the appreciation to your beneficiaries without gift tax.
Donors may exclude the appreciation and gift taxes paid from their gross estate to the benefit of the individual beneficiaries.
As with any estate planning tool, contact your professional advisor
to explore the benefits of a charitable lead trust.
A time-honored way to ensure that your charitable wishes continue into the future is for you to include a stipulation in your will providing that a cash gift or percentage of your assets be donated to the Elk County Community Foundation's fund of your choice.
A Bequest can be arranged in several ways:
General Bequest - leaves a certain dollar amount.
Specific Bequest - leaves a piece of property such as stock or real estate.
Residual Bequest - leaves all or a portion of what remains from an estate after debits, taxes, expenses and other request have been paid.
Contingent Bequest - leaves assets only under certain conditions - if a spouse or other beneficiary does not survive for example.
Prepare a will. Only 50 percent of those who pass away have one. The value of the bequest will not be subject to state taxes. Leave a gift in your will for the charitable organizations that made a difference in your life.
*The Elk County Community Foundation does not provide legal or tax advice.
Please contact your tax and/or legal advisor for such guidance.
The future of our communities is determined by the decisions we make today. If you are interested in providing perpetual, simple and effective support for charities of your choice please contact us.