| The information on this page is general in nature
and is not designed to render legal or tax advice. You should obtain the services
of an attorney or professionally trained person for that purpose. |
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| Gifts of Cash |
| Outright gifts of cash represent a vital and important source
of financial support. They are simple to make and to receive. They offer the
donor a tax deduction equal to the full value of the gift, as long as charitable
deductions do not exceed 50% of the adjusted gross income in the year of the
contribution. (Any unused deduction may be carried over to the next five years.) |
| Gifts may be designated or undesignated. |
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| Wills |
| A will is the most common estate planning tool and is one of
the simplest ways to make a gift to the Foundation. A will bequest can take the
form of a specific monetary amount, a specific asset, a percentage of the estate,
or the residue of the estate after other gifts are made to loved ones. Wills
can also establish charitable unitrusts, which pay life income to one or two
designated people and then benefit the Foundation. This basic estate-planning
tool can enable ministry though the Foundation for years to come. |
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| Real Estate and Appreciated Securities |
| A charitable gift of property (residential, rental, oil and
gas, or commercial) can offer significant income and tax advantages to the donor. |
| Many donors to the Foundation choose to make gifts of appreciated
securities rather than cash to avoid paying tax on the capital gain. For income
tax purposes, the value of your gift at the time of donation is deductible. |
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| Life Insurance |
| Life insurance provides another excellent means of making a
charitable gift to the Foundation. Supporters of church ministries and outreach
can make a significant contribution after their death by naming the foundation
as one of the beneficiaries of their life insurance policy. |
| A series of relatively small payments for premiums enables a
donor to make a substantial gift. This gift might be greater than what an individual
might otherwise be able to afford. In addition, the gift of life insurance will
serve as a lasting memorial to you and your family. |
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| Memorial Gifts |
| Establishing a memorial fund in the name of the donor or in
memory of a cherished friend or relative may be provided for in any of the Life
Income Plans offered by the Foundation. The deferred gift will continue to honor
the person memorialized and extend the work to Christ’s kingdom for generations. |
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| Charitable IRA |
| Persons who are no longer eligible for a tax deduction through
funding an Individual Retirement Account may wish to consider placing $2,000
annually in a Deferred Payment Gift Annuity. Donors funding an annual “Charitable
IRA” could defer income until retirement, receive an immediate income tax
deduction, and have a substantial stream of income that is partially tax free
during their retirement years. |
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| A Sale and Unitrust |
| This type of gift arrangement involves the combination of a
Sale of a portion of an asset and a funding of a Charitable Remainder Unitrust
with the balance of an asset. This combination sale and gift is excellent for
converting highly appreciated low-yield property into both liquidity and an investment
asset with little or no capital gains tax. |
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| An Educational Unitrust |
| Parents or grandparents may transfer an appreciated asset to
a Term of Years charitable Remainder Unitrust for the benefit of a student. By
properly structuring the trust, the donor can receive a significant income tax
deduction, large capital gains tax savings, and pass income to the student during
the term of the trust while bypassing the gift tax. After the term of years,
the Foundation would receive the trust assets. |
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| A Retirement Unitrust |
| This type of trust uses a Charitable Remainder Unitrust and
is usually funded during the last 10 to 15 years before retirement. Since the
remainder eventually goes to the Foundation, there will be an income tax deduction
each year in which a transfer is made to the trust based on the value of the
property transferred. If the income is left to accumulate in the trust, the trustee
can invest for growth and the trust will provide a generous supplemental income
during retirement. The Unitrust is not subject to executor’s fees, estate
taxes, or probate costs. |
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| Life Income Plans |
| What is Life Income Plan? |
| A Life Income Plan is a financial and philanthropic arrangement
whereby a gift to the Foundation of cash, securities, or other property continues
to provide income for life to the donor and/or another person whom the donor
may designate. After the lifetime of the income beneficiaries, the gift passes
permanently to the Foundation. |
| What Does a Life Income Plan Offer You? |
| The benefits of a Life Income Plan are many: |
- The joy of providing a significant gift to advance the mission of Lovers
Lane United Methodist Church.
- A life income which may be larger than the income
previously produced by the donated assets.
- A substantial income tax charitable
deduction.
- Avoidance of capital gains tax on any appreciation in the value of
the donated asset.
- Possible tax savings on the income you receive.
- Estate tax savings.
- No financial management worries or responsibilities.
- An opportunity to honor
a cherished relative or friend through establishing a memorial fund.
- The satisfaction
of knowing that you have provided a legacy for the Church during your lifetime.
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| Charitable Gift Annuities |
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What is a Charitable Gift Annuity? |
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A Charitable Gift Annuity is an agreement under which a donor
irrevocably transfers cash, securities, or other assets to the Foundation for
the benefit of the Church. In return, the Foundation promises to pay an annuity
or fixed dollar amount to one or two annuitants for as long as they live. The
annuitants may include you, your spouse, some other family member, or friend. |
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A Charitable Gift Annuity is a combination “gift” and “investment.” The
amount of the yearly payment is computed at the time of the gift from the tables
of the Committee on Gift Annuities. Determining factors are age, sex, and number
of annuitants. (Note: If the donated asset is in the form of long-term, appreciated
securities, part of the annual payment may be taxable at the capital gains rate.) |
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What does a Charitable Gift Annuity Offer? |
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- Satisfaction – You are assured of the lifetime joy of helping to enlarge
and strengthen the outreach of the church.
- Guaranteed Life Income – You
receive an attractive income guaranteed for life at an annual rate, depending
on your age and the value of the principal provided.
- Tax Advantages – You
receive substantial tax benefits including taxable deductions, tax-free income,
capital gains tax savings, and no estate tax.
- Safety – You are freed from
burdensome investment decisions while being provided with maximum safety.
- Flexibility – Your
Gift Annuity may be created with cash, securities, or real or other property,
and may be for any specified amount.
- Your Legacy – The principal that remains
after death is a gift to:
- Special projects or certain capital expenditures that support Lovers Lane
beyond the church’s normal operations.
- Special benevolence and/or mission
work.
- The Foundation Endowment Fund, to be held and invested in perpetuity with
only the income going one-half to special projects or capital expenditures and
one-half to special benevolence and/or mission work
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Is a Charitable Gift Annuity Right for You? |
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A Charitable Gift Annuity can be shaped to meet your needs.
Most commonly, it appeals to donors able to make gifts of $2,000 or more who
wish to ultimately help Lovers Lane United Methodist Church while receiving a
guaranteed life income with certain beneficial tax considerations. |
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Donors with an eye toward retirement, who anticipate a reduced
income stream, may wish to consider a Deferred Payment Charitable Gift Annuity.
If you have a high current income and could benefit from a tax deduction now,
you may wish to consider this type of annuity. Your annuity payments can be “deferred” until
your retirement years when you will presumable be in a lower tax bracket. |
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A Brief Example |
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A donor, age 72, is considering a gift of $10,000 in securities
to a Charitable Gift Annuity for Lovers Lane United Methodist Church. |
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The securities now yield $400 in annual income, a 4% return.
Here is what the gift can accomplish for his or her income: |
