A planned gift is a philanthropic gift and legacy that is funded either during the donor’s lifetime or after the donor’s death. The gift is part of a larger estate-planning process in which the donor decides how certain assets are distributed.
Why Planned Giving?
The tax advantages are substantial, especially on appreciated securities and properties. The total income, estate and capital gains tax savings and probate expense savings can come close to the amount transferred.
Planned gifts remove property from probate, thereby reducing or eliminating probate expenses.
Your Planned Giving Options:
1) Gifts of IRAs / Retirement Plan Assets
You can designate AACA as a beneficiary at your death of part or all of the remainder of your IRA or retirement plan. Distributions from retirement plans at the death of the survivor of the account-holder can be subject to both income and estate taxes. In a large estate, these taxes can leave less than 30 cents on the dollar of the plan’s balance for your children or other heirs.
- By naming the Asian American Civic Association as the beneficiary of the remainder of your retirement plan, 100% of the plan’s balance will be donated to AACA’s mission, since the distribution avoids both income and estate taxes.
- You can have the satisfaction of making a significant gift that offers you immediate tax benefits and will also aid AACA’s mission of lifting immigrants out of poverty.
Bequests are the transfers of wealth that occur upon a donor’s death and that include transfers by means of a will or a trust.
- Your assets are available to you and are only transferred after your death.
- You can provide now for a future gift to AACA by including a bequest provision in your will or revocable trust.
- A trust can direct assets to many people and / or organizations for the purpose(s) you specify.
3) Appreciated Securities
Securities are the most common form of property given to non-profits. These are usually gifts of stocks, bonds, stock options and mutual funds. With a gift of appreciated securities held for the required holding period, donors are entitled to a charitable deduction for the full market value.
- You receive an immediate income tax deduction for the fair market value of the securities on the date of transfer no matter what you paid for them.
- You pay no capital gains tax and no gift tax on the securities you donate.
- You can direct your gift to a specific fund or purpose.
- You can have the satisfaction of making a significant gift now or funding a life-income gift that benefits AACA later.
4) Life Insurance
There are two simple ways to use life insurance to help AACA. The first is to buy a new insurance policy on your life for your family to replace the value of property given to AACA. The second is to give an existing policy on your life that is no longer needed by you to AACA.
- You receive greater tax savings than by leaving the same gift to your heirs.
- With the amount you save in taxes, you may be able to purchase life insurance with death benefits that are equal to the value of the gift you gave to AACA. In that way, you provide for your family and for AACA.
- You can have the satisfaction of making a significant gift that benefits you now and AACA later.
For more information on any of these giving methods or to explore alternative ways to support AACA feel free to contact Teresa Cheong, Development Coordinator, at 617-426-9492 ext. 206.