Bequest

Gift Annuity

Trust

•Perhaps the most common way individuals make planned charitable gifts.

•Work with an attorney to add a codicil to your will.

•Minimal cost to establish.

•Can designate charity as a beneficiary to receive:

¨% 0f remainder

¨Fixed dollar amount

¨Specify property (collectible, land, etc.) from your estate.

•Revocable - can change at any time, therefore no immediate tax deduction gained.

•Suggested language is available from First Preference, LLC. or your estate planner.

•A simple contract between the charity and you.

•No cost to establish.

•Minimum* with which one can fund an annuity: $5,000

•Minimum* age at which one can establish an annuity: Age 50, unless a deferred annuity and then payments may not begin before age 50.

•Receive fixed payments for the rest of your life.

•Can name a second person, as well, to receive payments for the rest of their life.

•"Variations on the theme": deferred annuity and a college annuity.

•Irrevocable - therefore you receive an immediate charitable tax deduction.

•Think of it as a box in which you place some of your assets.

•Many "variations of the theme." Some are irrevocable, therefore an immediate charitable tax deduction is received. Some are not ( Revocable Living Trust).

•Minimum* with which one can fund a trust: $100,000

•Need to work with an (estate planning) attorney.

•Must have a trustee (can be self, bank, etc.) as well as someone to manage the assets (nonprofit, trust department of a bank, etc.)

•Can use interest earnings off the trust during your lifetime.

•Charity benefits by receiving some or all of (value of) assets in the trust at your passing.

•Three common types of trusts are Annuity Trusts, Unitrusts, and Lead Trusts.

¨Annuity Trust - Fixed dollar amount comes to you annually.

¨Unitrust - Fixed percentage amount comes to you annually.

¨Lead Trust - You allow charity to use the interest off your money for a fixed period of time, then the principle goes back to family or whomever you designate.

Bargain Sale

Retained Life Estate

•Sell property to a charity for less than its fair market value.

•Is both a gift to charity and a cash back to donor.

•Seller claims a charitable deduction on the difference between the property fair market value and the price paid by the charity.

•Effective way to dispose of property for which seller would owe significant capital gains tax. Partial charitable deduction can offset capital gains tax.

•The bargain sale involves the use of unrestricted funds by the charity, so it is important that the property is either wanted/needed by the charity or is easily converted into cash through a sale.

•Gift your home to charity, but reserve the right to live in it for the remainder of your life.

•Must work with an (estate planning) attorney.

•Irrevocable, therefore you receive an immediate charitable tax deduction.

Common Gifting Strategies...

*Check with your nonprofit about their specific gift acceptance policies.

POPULAR WAYS TO FUND PLANNED GIFTS

What's Inside?

The descriptions contained herein are informal and only thumbnail sketches of powerful financial planning opportunities. These techniques can help you and your family reach both your financial and charitable goals. For more information about how these gifting strategies can benefit you and your favorite charities, contact First Preference, LLC. or your personal financial advisors.

Qualified Pension Plan

•Often when individuals reach the age at which they must start taking withdrawals from their pension plan, this increases their tax liability. Instead, pass it on to charity, reduce your tax liability, and also receive a charitable deduction for your gift.

•Consider naming your favorite charity as beneficiary on your qualified pension plan.

A brochure produced by

First Preference, LLC.

Real Estate

Shirl Shaffer, MA., CFRE.

19 Woodlynn Drive

Selinsgrove, PA. 17870

Office: (570) 374-6601

Cell: (570) 850-7632

email: sshaffer@firstpref.org

http://www.firstpref.org

•Consider a gift of land, second home, primary residence, or office building.

•Charitable tax deduction upon transfer of deed to charity.

•Consider a "Bargain Sale" that gives you immediate cash upon the sale of the property, as well as a tax deduction.

•Consider using real estate to fund one or more of the above gifting vehicles, particularly a deferred gift annuity.

Life Insurance

Life insurance can be used in three ways to gift to a charity:

•Name the charity as a beneficiary. (Revocable, so there are no immediate tax advantages.)

•Give ownership of the policy to the charity. (Irrevocable, so there is an immediate tax advantage.)

•Use life insurance to replace the value of other assets donated to charity from your estate. (i.e., Fund $50,000 gift annuity from your estate, then purchase life insurance in that amount to eventually benefit your heirs - effectively replacing the amount you donated.)

Stock

•Stock can be given outright to a charity (not a planned gift in that case), or it can be used to fund another gifting vehicle. Either way, ..

¨Do not sign the back of the stock, and do not sell the stock; rather, simply give it to charity; otherwise, you will not receive a charitable tax deduction, and you will not benefit from any capital gains advantages.

•Irrevocable, so there are immediate tax advantages.

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