Create a Legacy of Support for Sacatar!
Supporting the activities and programs of the Sacatar Foundation through a planned gift is a wonderful way to create a legacy. Different planned giving methods offer advantages and features that should be considered carefully as you make decisions about how to support Sacatar and its programs AND also meet your estate planning needs. These decisions should be made only after consulting family members and trusted advisors. Sacatar’s staff is available to offer advice and direction in preparing a planned gift that meets the mutual needs of both you as the donor and Sacatar as an organization. To discuss a planned gift to Sacatar, please contact Sacatar’s Director of Advancement, Lissa Gibbs, at email@example.com.
How Does Planned Giving Work?
Planned giving can be done in a variety of simple and effective ways, all of which benefit the donor as well as Sacatar.
The simplest way to give to Sacatar is by including it in your will. If your will does not yet contain such a gift, a very simple amendment to it (called a “codicil”) can be executed with a minimum of effort and legal fees. Sacatar staff can recommend sample language to include. Amounts given by will are not taxable in the estate. We would appreciate knowing in advance if you plan to make such a gift. It’s not necessary to tell us the amount of your bequest, but knowing you plan such a gift would be rewarding to you and would allow us to confirm our ability to fulfill the intentions of bequest as you envision it.
A Gift that Gives Back – Charitable Remainder Trust (CRT)
This gift allows the donor to keep the benefit of owning an asset while transferring the portion remaining after her or his heirs’ death(s) and receiving the tax benefits of the future gift while enjoying income rights from the asset. For example, a donor owns an account with a brokerage worth $500,000, mostly in bonds and dividend stocks from which she receives $35,000 yearly in income for her daily living expenses. She has other assets and knows she will not need the principal from the investment, but only needs the income. She also has other income from stocks and pension funds. She sets up a CRT with her attorney which transfers to the Sacatar Foundation the remainder from the $500,000 in place at her death, after using the funds for her lifetime for the same income purpose for which she already uses them. She gets, immediately on transfer to the CRT, an income tax deduction for the present value of the future gift. She can use the deduction to offset other current income. Therefore, she comes out ahead financially by making the CRT. If the property is appreciated stocks or real estate, the additional tax advantage is that no capital gains tax is due when she sells the asset. Also, the amount of the transferred property is shielded from payment of estate tax on her death. A CRT donor is free to designate a reasonable percentage of the annual return from the asset, with 5% as the minimum. In the above example, she would take at least $25,000 annually in income from the CRT. If she specified an 8% annual payout, she would actually receive $40,000/year during her life. She can also specify a fixed amount per year, like an annuity, to be generated from trust income and assets.
Many donors own appreciated real estate on which the earnings are fairly small. They don’t wish to sell the asset and incur the resulting capital gains. By deeding it to the CRT, the trustee can sell the asset without capital gain tax, put the money in a more productive investment and provide the donor with a higher lifetime income, all while reaping the immediate income tax benefits from the value of the future gift.
A CRT to Sacatar provides the satisfaction of giving to a very worthwhile cause while enjoying considerable tax benefits and the peace of mind of knowing that you will be paid a specified amount or formula amount for the duration of your life. These benefits may also extend to the lives of spouses or certain heirs.
Retirement Plan Donations
Your IRA or retirement plan has been accumulating on a tax-deferred basis for many years. If you bequeath one of these assets to your children, they will pay income tax on the lump sum or income from the plan. If you give the plan proceeds to Sacatar, no taxes are due. You can then give your heirs something else (like real estate) that will be a much lesser burden on their taxes.
A donor who designates Sacatar as the beneficiary of an existing life insurance policy or who takes out a new policy naming the Sacatar Foundation as beneficiary will get substantial tax benefits.
All contributions or gifts to the Sacatar Foundation or to the Sacatar Fund at the Tides Foundation are eligible for tax deductions as contributions to 501c3 organizations. If you itemize your tax deductions, you may claim a federal charitable income tax deduction for your gift to the extent provided by law in the year of contribution. Any charitable income tax deduction is subject to certain limitations, so please consult a tax professional regarding contributions reported as tax deductions. Contributions to the Sacatar Fund at the Tides Foundation are exempt from federal and state gift, estate and generation-skipping transfer taxes.