Estate Planning to Save Big Cats
In addition to Bequests and Life Income Giving, there are lots of other creative ways you can help the cats and plan your estate effectively, such as:
Gift of Life Insurance
Making a gift of life insurance offers a number of important benefits; Big Cat Rescue receives the life insurance benefit; a gift of life insurance is fixed, and it’s a simple way for you to provide us with a significant gift and establish your legacy. A gift of life insurance can also offer immediate tax savings and ensures that your entire estate passes directly to your heirs.
Some of our supporters no longer need their life insurance that was purchased years ago to provide for children or other family members. If that is your situation, please consider donating the policy to Big Cat Rescue. You may claim a charitable deduction for approximately the policy's cash surrender value, and the proceeds are completely removed from your estate.
Pooled Income Fund
Pooled Income Funds are one of the most efficient charitable planning tools available today. They deliver many benefits to the donor while greatly simplifying the charitable giving process. Your gift of money, marketable securities, or both to Big Cat Rescue's pooled income fund is invested together with similar gifts from other supporters. Each year, you receive your share, which is taxable as ordinary income, of the fund's earning.
For example, Mr. Simon's $10,000 life income gift is invested in our pooled income fund. The fund's net income is 6 percent this year, so he receives $600--his share of the annual earnings. Each year, Mr. Simon's payment will reflect any increase or decrease in the fund's net income.
Pooled Income Funds are one of the most efficient charitable planning tools available today. Pooled income funds are especially appropriate for individuals who have need for a good income but do not have substantial capital, and for those with substantial assets who cannot afford a reduction of income if the assets were depleted. Similar to mutual funds, pooled income funds are trust funds into which donors contributions are pooled and invested.
Pooled Income Funds allow you to make a charitable gift today, earn an income for life, avoid capital gains, support Big Cat Rescue and get an immediate tax deduction.
Charitable Lead Trust
Individuals with very large estates can use a charitable lead trust to benefit Big Cat Rescue and pass principal to family members with little or no tax penalty.
Example
The Smiths decide to place $10 million in assets into a Charitable Lead Trust. They also decide that Big Cat Rescue is to receive 5 percent for 25 years. The results are as follows:
- Provide Big Cat Rescue with an annual gift of $500,000 or $12.5 million over 25 years.
- Minimize the estate tax.
- Minimize the generation skipping tax.
- Pass along the full $10 million gift to the grandchildren plus the growth on the assets in the trust over and above the 5 percent paid out to Big Cat Rescue.
Charitable Lead Trusts are complex, but they are also highly flexible and can be extremely effective. With a charitable lead trust, you are giving Big Cat Rescue the income from the asset and not the asset itself. By taking the time to plan your charitable gifts, you may be able to take advantage of some special tax benefits and make charitable giving a real win-win situation.
Gifts of Retirement Plans
Retirement funds can be among the best assets to use for a charitable gift. Many individuals today have large qualified retirement plans such as an IRA, 401(k), or Keogh plans. These assets have been growing tax-free for years. Once the owner begins to receive payments from the qualified plans, the distributions are taxed. The plans are also included in the owner's taxable estate. Retirement plans, including pension, 401k, IRA, Keogh, 403(B), are often subject to extremely high tax rates that result in an "involuntary gift" to the federal government.
Designation of your retirement plan to Big Cat Rescue allows the donor to save considerable tax consequences for their children or other retirement fund beneficiaries. Unfortunately, many retirement plan owners do not give much thought to what happens to the funds after they have passed away. In some cases, giving away retirement funds can actually increase the amount of funds available to beneficiaries.
One way to make a gift of your retirement plan is to create a charitable remainder trust through your will. It works like this: Your IRA assets will be transferred to a charitable remainder trust. There is no tax due because the charitable remainder trust is a tax-exempt entity. The trust will provide life income to the beneficiary (for example, your child) with an eventual gift to Big Cat Rescue. The beneficiary will pay income tax on the distributions from the trust. Your estate will receive an estate tax charitable deduction for the value of Big Cat Rescue's right to eventually receive the trust assets.
Your accountant or attorney can provide additional information on gift opportunities and which method would be the most beneficial for you and your family. This information is general in nature and does not constitute legal or financial advice, and should not be relied upon as a substitute for professional advice.
You can start helping right away by making a tax deductible donation:
|