Legacy Giving Made Easy

Planning today for your legacy tomorrow

L

egacy giving simply means planning now to leave a charitable gift after your lifetime, creating a future source of support for the causes you care about. In our work, we find that generous people decide to give in this way for a variety of reasons, the most common of which include:

• You have no heirs and want the satisfaction of knowing that the remainder of your life’s work will support the organizations that are important to you.
• You have heirs and want to set an example by involving future generations in charitable giving as part of your family legacy.
• You want a meaningful alternative to leaving everything to your family and taxes. Many people prefer to provide their heirs “enough so they can do something, but not so much that they do nothing” and they want to reduce estate taxes, both of which may be accomplished by establishing a Legacy Fund at the Foundation.

Before she passed away, Helen made a provision in her estate plan to endow a scholarship to help students who've graduated from Woodland Adult Education continue their educations in college or trade school.

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Opening a charitable fund at a community foundation like the Sacramento Region Community Foundation makes planning your legacy giving simple; it is an effective way to ensure that the organizations and causes that you care deeply about will continue to receive support beyond your lifetime.

As you plan your charitable legacy, consider these questions to inform your thinking, which we pose to our fundholders:

• Which community organizations are meaningful to you and your family and have touched your lives in important ways? One advantage of working with a community foundation like ours is that you can adjust your legacy plan as often as you like without having to make costly revisions to your trust.
• When your estate is realized (that is, after you have passed away), would you prefer to give a large sum to the nonprofits on your list immediately, plan for long-term support by creating a permanent endowment, or a combination of the two? We can easily customize your charitable fund's grantmaking to match your philanthropic wishes.
• Do you have children and/or grandchildren whom you would like to involve in making charitable decisions in the future? If so, the Sacramento Region Community Foundation makes it simple to involve and empower them to make gifts from your fund, according to guidelines you establish.
• What asset, fixed amount, or percentage of your estate do you plan to give? We encourage you to talk over the options that may be best for you with your financial/legal advisors, but many who use charitable funds at the Foundation to facilitate their legacy giving use the giving strategies described below.

How Will You Build Your Legacy?

Many people work with their attorneys or financial advisors to plan their legacy giving and arrange to leave resources to the nonprofits they support in their wills or estate plans, regularly turning to community foundations like ours to simplify the process and add value. At the Foundation, you can establish a charitable fund — including a dedicated Legacy Fund — with a variety of assets and immediately enjoy the benefits of being part of the Foundation family.

James and Virginia Benson left a legacy bequest to establish their charitable fund, which now supports organizations in Placer County that provide assistance to the elderly.

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The Most Common Legacy Gift: A Simple Bequest

Naming your charitable fund at the Foundation as the beneficiary of a gift through your will or estate plan allows you to feel good about your contribution now while parting with your assets after your lifetime. The suggested bequest language is very simple:

“I, [Name], of [City, State, Zip Code], give [Particular Asset; Fixed Dollar Amount; Percentage of the Estate; or Description of Property] to [Your Fund Name] at the Sacramento Region Community Foundation.”

When planning a gift through your will, it’s sometimes difficult to determine what size donation makes sense. You may need to make sure your family is taken care of first, as emergencies do happen. For that reason, many donors choose to make a bequest of a percentage of their estate to ensure their gifts will remain proportionate no matter how their estates' values fluctuate over the years.

Gifts You Can Make Today, Without Changing Your Will or Trust

With beneficiary assets, such as retirement plans, life insurance or annuity policies, a simple Change of Beneficiary Form will allow you to direct future gifts to the charitable fund you establish at the Foundation. In most cases, you can download the form easily from your plan administrator’s website.

• Retirement Plan Assets: You can name your charitable fund as the beneficiary of all or part of your retirement plan assets (such as a 401k or IRA) today and protect your estate from taxes later. You can eliminate income taxes on any portion of your retirement plan assets that you leave to your fund. (Note: Retirement assets you leave to your family could be eroded by income tax of up to 35%. Also, there are restrictions on contributing to a Donor Advised Fund from an IRA. Please consult with your advisor prior to considering this option.)
• Life Insurance or Annuity Policy: Your life insurance or annuity policy can become a charitable asset when you name your fund at the Foundation as the beneficiary of all or a portion of the policy’s death benefit. It’s a simple and generous way to pass on your values.

Through his Charitable Remainder Trust legacy gift, Dave Ramsay established a fund commemorating his great love of music. The J. David Ramsey Music Endowment is now providing annual income for organizations that perpetuate his passion for music.

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Legacy Gifts That Allow You to Give and Receive

Many of our donors use the following gift options as time-tested ways to give and receive. Each will allow you to enjoy tax benefits while receiving a fixed rate of return annually for a specified period of time. At the same time, you can ensure that your assets are used to benefit the community in ways that are meaningful to you.

• Charitable Gift Annuity: With a Charitable Gift Annuity (CGA), you can make a gift of cash or appreciated assets to your fund, which, in turn, provides you with fixed payments for life and an immediate tax deduction. After your lifetime, the remaining amount of your gift goes directly into your charitable fund at the Foundation. Through this arrangement, you can increase your income now and receive numerous tax advantages, including:

  • A partial income tax charitable deduction.

  • Partially income tax-free payments for your estimated life expectancy.
  • Capital gains tax on appreciated property, spread throughout your estimated life expectancy.
• Charitable Remainder Trust: With a Charitable Remainder Trust, you use cash or appreciated assets to fund a charitable trust and decide on the size of the payments (within IRS limits) to yourself and/or others you choose. The trust assets remaining at the end of the beneficiary’s lifetime go to your charitable fund. You also receive tax advantages, such as:
  • A partial income tax charitable deduction based in part on your age and the amount you contribute to the trust.
  • Elimination of any up-front capital gains tax when you fund the trust.
• Charitable Lead Trust: Often described as the opposite of a Remainder Trust, a Charitable Lead Trust may be an excellent way to grow your charitable fund now and take care of your family later. You can use cash or appreciated assets to establish the trust, which will make periodic payments to your charitable fund. At the end of the trust’s specified time period, the remaining assets will be distributed to the individual(s) of your choice, and may provide you and your family with many benefits, including:
  • It is a generous way to grow your charitable fund with regular, dependable gifts – and you can direct the giving from your fund during your lifetime and beyond.
  • It allows you to transfer assets to your heirs at a reduced gift and estate tax cost because the assets in the trust are removed from your taxable estate.

Legacy giving empowers you to make an enduring contribution to your favorite causes. And, when you partner with the Foundation for your legacy planning, we make the process simple and fulfilling. Our team is dedicated to carrying out your wishes, and we will work with you and your professional advisors to ensure that your legacy giving achieves your unique charitable goals.

READY TO GET STARTED? CONTACT THE FUNDHOLDER RESOURCES TEAM TO SCHEDULE A MEETING

The information provided here is general and educational in nature, and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific situation.