Planned Giving Options
Many of our supporters make charitable gifts by naming the American Red Cross of the Heartland as a beneficiary in their wills. The federal government encourages these gifts or bequests, by allowing an unlimited estate tax charitable deduction.
There are three ways you can make a bequest:
Designate a specific dollar amount, specific percentage, or specific property to the American Red Cross of the Heartland.
Your estate pays all debts, taxes, expenses, and specific bequests. The remaining amount--the residue--is transferred to the American Red Cross of the Heartland.
You ask that the American Red Cross of the Heartland receive all or a portion of your estate only under certain circumstances. For example, you can name the Red Cross as a beneficiary of your estate only if there are no surviving close family members.
To make a bequest to the American Red Cross of the Heartland, the following language will be helpful to your lawyer:
I give, devise, and bequeath to the American Red Cross for the benefit of the American Red Cross of the Heartland the sum of _______ (or otherwise describe the gift or specify a percentage of the estate).
Life Income Gifts
You irrevocably transfer some assets to the American Red Cross of the Heartland now, and in return, you (and a survivor, if you wish) receive income for life. As a result, the assets are used to carry out our mission.
• A charitable deduction in the year you make the gift for the present value of our right to eventually receive the assets.
• Your effective yield is increased by substantial income tax savings.
• Income can be taxed more favorably in some plans.
• Your probate and estate administration costs may be reduced.
Examples of Life Income Gifts
Charitable Gift Annuity
In exchange for your gift of cash or marketable securities to the American Red Cross, we agree to pay you (and a survivor or other beneficiary) a fixed amount annually for your lifetime. The transfer is part gift and part purchase of an annuity. The rate of return is attractive and the payments are guaranteed for life.
Charitable Remainder Trust
Created by transferring assets to a trust that pays you (and another beneficiary, if you wish) income for life. At the end of the trust, the remaining trust assets are transferred to the Red Cross. A bank or trusted advisor can serve as trustee.
The type of charitable remainder trust you choose determines your annual payments:
• Charitable Remainder Annuity Trust
Pays you a fixed dollar amount annually for life determined by the payout percentage selected at the beginning of the trust. You can claim a charitable deduction on your income tax form the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.
• Charitable Remainder Unitrust
Pays you a fixed percentage of the fair market value of the trust assets, as revalued each year. Like the annuity trust, you can claim a charitable deduction on your income tax form the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.
Gift of Life Insurance
Some of our supporters no longer need their life insurance that was purchased years ago to provide for children or other family members. If that is your situation, please consider donating the policy to the American Red Cross. You may claim a charitable deduction for approximately the policy's cash surrender value, and the proceeds are completely removed from your estate.
Pooled Income Fund
Your gift of money, marketable securities, or both to the American Red Cross's pooled income fund is invested together with similar gifts from other supporters. Each year, you receive your share, which is taxable as ordinary income, of the fund's earning.
For example, Mr. Simon's $10,000 life income gift is invested in our pooled income fund. The fund's net income is 6 percent this year, so he receives $600--his share of the annual earnings. Each year, Mr. Simon's payment will reflect any increase or decrease in the fund's net income.
Please see your advisor and consider a Charitable Remainder Trust or Annuity as another way to honor your intentions.
For more information, please call Scott Vogel at (309) 662-0500, ext. 25.