PLANNED GIVING: Other Planned Gift Arrangements

Other Planned Gift
Arrangements

OUTRIGHT GIFTS

LIFE INCOME PLANS

WILLS and ESTATE PLANS

ENDOWED FUNDS

RECOGNITION

Charitable Lead Trusts

A charitable lead trust is like a charitable remainder trust in reverse. You select the assets used to fund the trust and decide how long it will last, and the Diocese receives income from the trust while it exists. There is no minimum payout. When the trust terminates, its assets return to you or your designated beneficiary. This type of trust can be useful if you want to reduce your current income, but wish to retain the assets for your family. A charitable lead trust can be a means to transfer substantial amounts of wealth from generation to generation, free (largely free) of estate, inheritance, and gift taxes.

A charitable lead trust is a complex giving vehicle with many income, estate, and gift tax consequences. You should discuss your goals with your legal and financial advisers to determine whether a charitable lead trust would suit your plans. You are also encouraged to contact the planned giving professional at the Diocese for more detailed information.

Advantages:

• Reduces current income while retaining assets
• Can be a low-cost means of transferring property to heirs
• Opportunity to make a substantial current gift to the Church
• Potential estate, inheritance, and gift tax savings

Gifts of Real Estate Subject to Life Estate

Your personal residence or farm may be the single most valuable asset you own. If it has appreciated significantly in value, you could owe tremendous capital gains taxes if you or your heirs sold the property. An alternative is to give the property to the Church subject to life estate, which simply means that you or your designees retain the use of the property for life.

You gain an immediate tax deduction for the remainder interest in the property, and you escape the potential capital gains taxes. Best of all, you get to make a substantial gift for a Parish or the Diocese without disrupting your lifestyle.

Gifts of this kind require detailed language tailored to your specific situation and needs, and the advantages and benefits vary accordingly. The Church's development staff will be happy to work with you and your advisers to help you arrange the best plan for you.

Advantages:

• Opportunity to make a substantial gift to the Church while retaining lifetime use
• Opportunity to make a substantial gift to the Church while retaining lifetime use
• Immediate tax deduction
• Avoid capital gains taxes
• Estate and tax and probate savings
• Can provide a favorable income tax position

Wealth Replacement with Life Insurance

When you make a gift to the Church, you may use a life insurance trust to replace the value of the donated assets. In this way, you can protect the interests of your heirs while still fulfilling your philanthropic goals. The life insurance provides the dollar amount, and the trust, provided it is irrevocable, removes the proceeds from your estate for tax purposes.

In this arrangement, you create a trust to buy insurance on your life, with your children as beneficiaries. You can use the tax savings from your charitable gift, or the payout from a life income arrangement, to cover the premiums. After your death, the proceeds from the policy pass to the trust free of estate taxes, thereby replacing the value of the original charitable gift.

Wealth replacement life insurance trusts can be set up in several different ways, and all have strict technical requirements. You should discuss them with your financial and legal advisers before deciding to pursue this option. The Church's development staff will be happy to answer your questions.

Advantages:

• Restores asset value to your estate at relatively low cost
• Opportunity to make a substantial gift to the Church without consequence to your heirs
• Estate tax and probate savings

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