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Together We Give
Charitable Planning Opportunities
We are committed to ensuring funding for programs we support while providing donors mutually beneficial giving opportunities. For this reason, the Hospital Foundation strives to offer a variety of charitable giving methods, while working with donors and their professional advisors as they consider opportunities that best meet their needs.
Planned Giving Newsletter: Visions in Personal Planning
Information for Attorneys, Brokers & Financial Advisors
Memorial and Honoraria Gifts -- Remember Someone Special
Gifts in memory of a family member, friend or healthcare professional, in honor of an individual or in recognition of a special occasion express what words alone cannot and provide important support for the Foundation. It is our policy to notify the honoree's family that a gift has been made. Please include the family's name and address if you would like us to do so. The amount of your tax deductible gift is not disclosed.
What to Donate
Cash -- The charitable income tax deduction from a cash gift lowers the actual cost of the gift for the donor
Stock -- A charitable deduction for the fair market value plus eliminate potential tax on capital gain
Bonds -- Recover forgotten bonds for a charitable gift
Retirement Plan -- Name the Hospital Foundation or one of the programs it supports as the charitable beneficiary of your retirement plan assets
Mutual Fund Shares
Life Insurance -- Receive a charitable income tax deduction for a whole paid life policy
Real Estate -- Gift at death or during life with the right to remain in residence for the remainder of living years
Gifts that Provide You or a Loved One with Income
Charitable Gift Annuity : You choose how much you want to give. In return, we provide set payments to you for your lifetime. You may choose payments to be delayed until you need them the most.
Charitable Remainder Trust
Charitable Lead Trust
Include the Foundation in Your Will or Trust -- Your Estate Plan
Make a gift of a dollar amount, a percentage of your estate, or your retirement plan assets.
Historical Society/Cumulative Lifetime Giving
Members of our Historical Society, as a result of generous, cumulative giving, qualify for special recognition. Donors who provide gifts year after year are at the heart of our fundraising program, and we appreciate the opportunity to draw attention to those who give regularly and at a significant level.
Legacy Society
Individuals who are members of the Legacy Society have included Columbus Regional Hospital Foundation in their estate plans. We are grateful for their generous and heartfelt support.
Thank you for considering a gift to Columbus Regional Hospital Foundation!
For Complete Information or To Ask Questions, Contact:
Ellen Brunner, Gift Officer
Columbus Regional Hospital Foundation
2400 East 17th Street
Columbus, IN 47201
812.376.5198 or 800.841.4938, ext. 5198
ebrunner@crh.org
Retirement Plan
Qualified retirement plans are defined as those plans that are eligible for special tax treatment. The two types of qualified retirement plans are annuity plans and individual account plans. Annuity plans, generally referred to as defined benefit plans, pay regular retirement income to a participant. Since these payments often terminate upon the death of the participant or the surviving spouse, there is usually nothing available to give to a charitable organization or to any other beneficiary.
In comparison, individual account plans are frequently described as defined contribution plans, and they resemble tax-sheltered savings accounts. The most common types are:
• Individual Retirement Accounts (IRA’s) for your contributions and tax-free rollovers
• 401(k) plans for pre-tax, voluntary employer contributions
• Qualified pension plans for regular employer contributions
• Qualified profit-sharing plans for flexible employer contributions based on company profits
• 403(b) plans (tax-sheltered annuity plans or TSA’s) for employees of public schools and nonprofit organizations
The Advantages of Gifting Retirement Plan Assets
Most people feel their first obligation is to provide for themselves and their family. At first, undistributed retirement plans may seem like suitable assets to give to heirs. However, because they are not reported on the final personal income tax return, they will be included in the gross income of the recipient. Leaving retirement plan assets to individuals can incur combined income and estate taxes of as much as 75% or more. However, a charitable bequest including those assets can help avoid this hefty taxation.
To fulfill charitable inclinations, professional advisors agree that undistributed assets in a qualified retirement plan are an ideal source for charitable giving. Using retirement plan assets to support a charitable cause is even more attractive as those assets are typically the largest source of income in respect of a decedent (IRD) in one’s estate. (IRD is the tax law term covering any asset subject to income taxes after death.) As alluded to earlier, upon one’s death, any remaining IRD assets will likely be very costly to their estate and their heirs. However, if assets are left to a charitable organization, a portion of the retirement plan’s assets is not taxed.
Options for Gifting Retirement Plan Assets
To direct surplus assets to a charitable organization at death, the organization may be named as the beneficiary on the plan’s designation form or the assets may be gifted to the organization through a will or trust. Naming a charitable organization on a plan’s designation form is the simple way. In comparison, a bequest through an individual’s will requires that precise language be drafted to avoid adverse tax consequences. If necessary, a brief amendment to a will or trust can be signed to implement a charitable bequest or to coordinate an estate plan with a beneficiary designation form.
One point to keep in mind is that, in certain qualified retirement plans, surviving spouses are automatically entitled to receive the entire benefit. Most plans require a spouse’s written approval of a different beneficiary. If it is decided that a spouse should be primary beneficiary, a charitable organization may still be named as either a successor or contingent beneficiary. This same tactic may be utilized if it is decided that children should receive a portion of the retirement assets.
Another option is to designate that assets be transferred to a charitable trust. This planned giving opportunity is designated to pay income to a chosen designee. The remainder is given to a charitable organization after a term of years or the lives of the designees.
Mutual Fund Shares
One out of every three households in America invests in mutual funds. Although funds of this nature have been in existence for more than 70 years, they have become more popular over the past 15 years. Most people rarely think of using mutual fund shares and other highly appreciated assets such as stock, real estate or other tangible property for charitable giving. However, this tactic makes a lot of sense, should you have charitable inclinations. This is especially true when considering the tax advantages of making such a gift. It can be a unique and rewarding way to meet financial objectives while fulfilling philanthropic intentions.
If you have owned shares of a mutual fund for a long period of time, you probably have noticed that your investment has greatly appreciated. Should you decide to liquidate any shares, you will be required to pay taxes, up to 20%, on their capital appreciation. This may mean a loss of a significant portion of the asset’s growth to capital gains tax. A more favorable way to enjoy capital appreciation is to contribute mutual fund shares to a charitable organization. By doing so, you are not required to pay taxes on the capital gain of the gifted asset. In addition, you will receive a charitable tax deduction that could be as high as the full fair market value of your contribution.
Charitable Gift Annuity
Charitable gift annuities have been around for a long time. The first U.S. gift annuity was issued in 1843. In return for your contribution, and pursuant to a signed agreement, Columbus Regional Hospital Foundation agrees to make fixed payments to you or a beneficiary for life.
Who may receive payments from the annuity?
Payments may be made to up to two beneficiaries (also called annuitants). While typically the donors name themselves, an annuity can also be established to benefit others, such as a parent or sibling.
What will the amount of my payments be?
The annuity payments will be determined at the time the annuity is entered into, and will be based on the age(s) of the annuitant(s) at that time. Please refer to the accompanying chart for sample rates for both one and two-life annuities.
How does a gift annuity benefit Columbus Regional Hospital Foundation?
At the end of the annuitant’s life (or, with a two-life annuity, the end of both lives), the remainder of the principal you have transferred will be used to support work underwritten by Columbus Regional Hospital Foundation such as Volunteers in Medicine, Columbus Regional Hospital, and Healthy Communities Initiative.
Are there tax advantages with a gift annuity?
Yes. The donor receives a charitable deduction in the year of the gift. In addition, a portion of the annuity payments will be tax-free, representing a return of the principal contributed.
Can I contribute securities for a gift annuity?
Yes. In fact, contributing highly appreciated securities, which you have held for more than 12 months, offer additional tax savings. The donor pays no tax on the capital gain attributable to the charitable gift portion of the contribution. If the donor is an annuitant, the gain attributable to the annuity payments does not need to be recognized in the year of the gift but can be spread out over life expectancy. You may also contribute cash, bonds and other assets to fund a charitable gift annuity.
I don’t need additional income now, so is a gift annuity wrong for me?
Not necessarily. You may want to consider a deferred annuity, with payments to begin at some future time. The charitable deduction is still received in the year of the gift, which may help offset current, higher income.
Charitable Remainder Trust
A charitable remainder trust is a unique arrangement that can enhance the retirement, investment, tax and estate planning of the donor while providing future support to Columbus Regional Hospital Foundation. In its most basic form, the charitable remainder trust is quite simple. The person creating the trust, otherwise known as the donor, irrevocably transfers money, stock or other property to a trust that he or she has created. The trust arrangement directs the trustee (typically a bank) to:
• Invest the property given to the trust
• Pay a specified annual income to the donor and/or another designated beneficiary for the life of the beneficiary or for a specified period of years; and
• Distribute the property to Columbus Regional Hospital Foundation at the death of the donor or other designated income beneficiary
When assets (cash, stock or other property) are transferred to a charitable remainder trust, the donor can receive an immediate deduction on his or her federal tax return. The tax deduction is equal to the present value of the trust principal, which Columbus Regional Hospital Foundation is to receive. Let’s look at an example.
A 68 year-old donor would like to establish a trust with $50,000. She would like an annual payout of 7% ($3,500) for as long as she may live. Depending on prevailing federal interest rates for the month she creates the trust, she can expect a deduction of between $17,000 and $20,000 as a charitable contribution. The charitable remainder trust is a very flexible planning tool.
• The donor can establish a fixed-dollar income (e.g. $3,500 in the example above) through a charitable remainder annuity trust or an income that will vary dependent on the financial performance of the trust assets (e.g., 7% of the trust value each year during life) through a charitable remainder unitrust.
• The donor selects the rate of income, usually between 5% and 7%, paid to the donor or his or her selected beneficiaries.
• The donor can direct that income be paid to themselves or another designated beneficiary for life or for a term of years.
A charitable remainder trust can be funded with:
• Cash
• Stock
• Bonds
• Life Insurance
• Real Estate
• Most other property interests
An asset that provides little or no income and has gone up in value since it was acquired could be ideal for funding a charitable remainder trust.
Charitable Lead Trust
A charitable lead trust would provide Columbus Regional Hospital Foundation with income from assets the donor transfers to the trust. On a future date the donor selects, the donor or someone that he or she designates would receive the trust assets.
There are two types of charitable lead trusts- the charitable lead annuity trust and the charitable lead unitrust. The difference between the two has to do with determining income.
The charitable lead annuity trust provides Columbus Regional Hospital Foundation with a set income each year, which is determined by the donor. However, the charitable lead unitrust offers the Foundation an income, which is variable. To accomplish this, the percentage the donor selects is applied to the assets in the trust as it is revalued each year. Therefore, as the assets in the trust experience growth, the Foundation receives an increased return on your trust.
The charitable lead trust results in beneficial tax treatment primarily for the donor’s estate. Depending on how the trust is structured, the donor should qualify for a gift or estate tax charitable deduction when the trust is funded. After the donor pays any gift taxes due at the trusts’ creation, no additional taxes will be due when the trust principal is distributed even if the assets have increased a hundred-fold in value.
Your Estate Plan
A will is an expression of your personal values and lasting commitment to family, friends and other causes close to your heart. It is the single most important tool that can be created to ensure that personal and philanthropic intentions reach far beyond your lifetime. Unfortunately, writing a will is often something people decide they can do later. If you do not have a will in place at death, the state will decide how your assets should be distributed. The state cannot be expected to know what you would have wanted to do. A valid and current will is essential for anyone who wants to avoid the expense, confusion, and family disharmony that may result without one. Everyone should have a will.
Charitable Bequest
A thoughtful and well-planned will provides support to those most important in our lives. Along with supporting loved ones, a will may include a charitable bequest that provides for a charitable cause. Including a charitable bequest in your will provides you with a sense that the wealth you have worked to accumulate during your life will have a lasting and significant impact on the lives of others. A charitable bequest may have added financial benefits such as an estate tax charitable deduction or even an income tax deduction. Whether you are preparing your will for the first time or revising a will that is already in place, consider including a charitable bequest.
Naming an organization as the beneficiary of a charitable bequest may involve the use of a variety of assets. Through your will, you may provide a fixed dollar sum, specific property or a percentage of your estate. If you decide to provide a gift of money, it is wise to consider the effects of inflation and other factors that may impact the goals and objectives you would like to achieve with your contribution. Specific property may also be given to a charitable organization through a will. Gifts of stock, a residence, or other personal property are examples of this kind of contribution. As with transfers of property during life, gifts of specific property provided through a will should be carefully planned with the help of an attorney. It is often beneficial to have the charity involved in the process as well to ensure that the gift transfer will be successful.
Remainder of an Estate
You may also decide to gift the residue of your estate to a charitable organization. The residue is defined as the remainder of an estate after all other gifts, debts, and taxes have been paid. This is an attractive option for individuals who do not have other plans in place for addressing those needs.
Keep in mind that a gift through your will or trust may qualify your estate for a charitable tax deduction. The charitable tax deduction you receive will decrease the size of your taxable estate as well as offset the remaining estate tax that may be due upon your death. You can also structure your bequest to provide after-death income tax benefits.
An important part of the planning process is identifying the project or need you would like to support with your charitable bequest. For example, you may choose to designate your gift be used for Volunteers in Medicine, a Columbus Regional Hospital Department or for Healthy Communities Initiative. The Hospital Foundation is happy to work with individuals confidentially to craft gift plans that are specific to their interests.
Once your attorney has prepared the necessary documentation, it is helpful to have a photocopy of the section that mentions Columbus Regional Hospital Foundation sent to our office. This will enable us to work with you to ensure that we follow your exact wishes.
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