Planned Giving
People often tell us, I wish I could give more. The
truth is that there are many ways friends can do more if gifts are
carefully planned. The term "planned giving" refers to charitable
gifts that require some financial, estate and tax planning before they
are made. Planned gifts are popular because they can provide valuable
tax benefits and/or income for life while helping a person positively
impact organizations they support.
Potential benefits of planned gifts
• Increase current income for yourself or others
• Reduce your income tax
• Avoid capital gains tax
• Pass assets to your family at a reduced tax cost
• Make significant donations to Northwest College Foundation
Types of
planned gifts
Bequest
When a donor names Northwest College Foundation
as a beneficiary in a will, it is a bequest. The donor's estate will
receive a charitable estate tax deduction when the gift is made.
Charitable
Gift Annuity
In return for a donation of cash or securities, NWC
Foundation agrees to pay a fixed payment for life to the donor or to
a friend or family member of the donor's choosing. The donor can claim
a charitable tax deduction. If a donor funds a gift annuity with long-term
appreciated property, the donor will have to report only some of the
capital gain, and may be able to report it in installments over many
years.
Income from a gift annuity can be deferred for a period of years.
Deferred gift annuities are often set up by younger donors to supplement
retirement income.
Charitable Remainder Trust
This trust makes payments,
either a fixed amount (annuity trust) or a percentage of trust principal
(unitrust), to whomever the donor chooses to receive income. The donor
may claim a charitable income tax deduction and may not have to pay
capital gains tax if the gift is of appreciated property. At the end
of the trust term, NWC Foundation receives whatever amount is left
in the trust.
Charitable remainder unitrusts provide some flexibility
in the distribution of income, and thus can be helpful in retirement
planning.
Charitable
Lead Trust
This trust makes payments, either a fixed amount (annuity
trust) or a percentage of trust principal (unitrust), to NWC Foundation
during its term. At the end of the trust term, the principal can either
go back to the donor (a grantor lead trust) or to heirs named by the
donor (a non-grantor lead trust). The donor may claim a charitable
income tax deduction for funding a grantor lead trust or a charitable
gift tax deduction for funding a non-grantor lead trust. Since lead
trusts are typically used to pass assets to heirs, non-grantor lead
trusts are far more common than grantor lead trusts.
Retained Life Estate
A donor may make a gift of a personal residence
or farm to Northwest College Foundation and retain the right to live
there for the remainder of his or her life. The donor receives an immediate
income tax deduction for the gift. At the donor's death, the Foundation
can use or sell the property.
Life Insurance
A donor can give a life
insurance policy to NWC Foundation or simply name the organization
as the beneficiary. For the gift of a paid-up policy, the donor will
receive an income tax deduction equal to the lesser of the cash value
of the policy or the total premiums paid. To qualify for the federal
charitable contribution deduction on a gift of an existing policy,
the Foundation must be named as owner and beneficiary.
Retirement Plan Assets
Retirement accounts are often exposed to
income taxes and estate taxes, at a combined marginal rate that could
rise to 75 percent or even higher on large, taxable estates. Naming
the NWC Foundation as the beneficiary of an IRA, 401K, Keogh or other
retirement plan can result in favorable estate tax reductions.
Trapper
Legacy Society
The Trapper Legacy Society recognizes NWC alumni and
friends who have made an estate commitment or a deferred gift to the
NWC Foundation to benefit Northwest College. Members will receive an
invitation to our annual Trapper Legacy Society event, a Trapper Legacy
Society pin, and special listing in the Foundation's Honor Roll of
Giving, unless you wish to remain anonymous.
Anyone who has made an
estate provision that includes the NWC Foundation, and who wishes to
become a member of the Trapper Legacy Society, is asked to inform the
NWC Foundation in writing. The size of the eventual gift does not need
to be disclosed at that time.
For more information, please contact the Foundation's Executive Director/Director
of Planned Giving or call 800.498.3914.
Note: We recommend that individuals consult with their
own tax or legal advisors prior to making a planned gift.
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