LEAVING A LEGACY: SOME THOUGHTS ON PLANNED GIVING
In the last several years, more individuals and families seem to be taking advantage of creative opportunities for “planned giving.” Planned giving can take many forms ranging from a simple one time monetary donation to a favorite non-profit organization to naming that organization as the beneficiary on a life insurance policy or an annuity. Some individuals may prefer to transfer an appreciated stock, set up a scholarship or endowment fund, or make a donation to help fund a specific organizational expense.
Gifts of securities, such as stocks and mutual funds, entitle the donor to an income tax charitable deduction equal to their full market value. On top of the deduction, the donor avoids capital gains tax on the securities contributed.
Annuities are especially attractive to both non-profit organizations and donors because they have fixed interest rates and a specific amount of money can be designated to be paid monthly, quarterly, or annually. This allows the organization to include that guaranteed income in their budget planning.
All donations to non-profit organizations are designated either “restricted” or “unrestricted.” Restricted funds (by IRS ruling) must be used for their designated purpose, whereas unrestricted donations and “in kind” gifts may be used for routine operations or as the organizational leadership sees fit.
The First Lutheran Classical School is a non-profit corporation, and all donations of cash, stocks, bonds, real property, equipment, or supplies are considered legitimate tax deductions on your federal and state tax returns. In some states, such as Montana, donations to 501(c)(3) organizations may even generate a tax credit to the donor.
In addition, Congress passed legislation several years ago that allows individuals age 70- 1/2 and older to make a tax-free charitable gift up to $100,000 annually from their IRA account.. Please consult with your tax accountant, financial planner, insurance agent, or attorney to see how you personally would benefit from a planned gift to the First Lutheran Classical School.
Below is suggested language to be used in wills, trusts, or letters announcing a bequest (i.e., gift). The language in brackets shows different alternatives depending upon the nature of the gift (residuary bequest, cash bequest, etc.) and whether the gift is restricted or unrestricted. The First Lutheran Classical School’s Tax Identification Number (TIN) should be included in your will, trust, or letter of designation.
IN A WILL
I give [the residue of my estate] [____ % of the residue of my estate] [$ _____] [description of a particular asset such as property, securities, etc.]
to be used where the need is greatest by (add name of the non-profit organization). or Page Two to be used to support [description of specific purpose such as a particular scholarship or project] administered by (add name of the non-profit) provided. However, if at some future time the Board of Directors or governing body of (add name of the non-profit organization) determines that it has become impossible or impractical to apply effectively the gift made hereunder to the restricted purpose specified (e.g. because a specified project, program, or scholarship no longer exists or its operation has been substantially reduced or changed), the gift made hereunder shall be used where the need is greatest as determined by the governing body of the organization.
IN A TRUST
The Trustee shall distribute [the remainder of the trust estate] [____ % of the remainder of the trust estate] [$_____] [description of a particular asset held by the trust]
to be used where the need is greatest by the (add name of the non-profit organization)
or
to be used to support [description of specific purpose such as a particular scholarship or project] administered by the (add full legal name of the non-profit organization); provided, however, that if at some future time the Board of Directors or governing body of the (add full legal name of the non-profit organization) determines that it has become impossible or impractical to apply effectively the gift made hereunder to the restricted purpose specified (e.g. because a specified project, program, or scholarship no longer exists or its operation has been substantially reduced or changed), the gift made hereunder shall be used where the need is greatest as determined by the Board of Directors or governing body.
IN A LETTER
This letter announces my intention to make an unrestricted gift of __________________ (cash, securities, property) to the (add the full legal name of the non-profit organization). This gift may be used as determined by the Board of Directors or other governing body. .
or
This letter announces my intention to make a restricted gift of __________________ (cash, securities, property) to the (add the full legal name of the non-profit organization) to be used for ________________________________ (clearly specify the intended purpose of the gift and any special restrictions).
In summary, if you are planning to make a bequest to First Lutheran Classical School, make sure you include the full legal name of the school and its current address in your will, trust, or letter of intention. It is wise to consult with your attorney periodically (perhaps every five years) to make sure the language in your will still conforms to your state of residence latest legal requirements.