Planned Giving

A bequest is typically the property or money that you promise in your will to give to another person or organization after you die.

Some Advantages

• It is a revocable document, meaning you can change elements in the will whenever you want.
• It can provide gifts that will perpetuate the charitable interests you have always had. If those organizations were important to you while you were alive, your bequest can continue your annual gifts in perpetuity.
• It can fulfill your desires rather than just disposing of your estate according to simple state law.

Some Disadvantages

• It is a revocable document, meaning you can change elements in the will whenever you want.
• It cannot provide some of the financial and charitable advantages of a more sophisticated planning document like a charitable remainder trust, for example.
• Because it is revocable, there are no immediate tax advantages.

Frequently Asked Questions

I’m not wealthy, can my bequest still make a difference?
Absolutely! You don’t have to be wealthy to create a lasting legacy. A bequest of any size can be significant in helping to preserve our mission and our outreach.

I already have a will. Do I need anything else?
Most experts agree that you should also have a “durable power of attorney” which allows another person to act on your behalf should you become incapacitated. Also, a “living will” helps your heirs in that it directs at which point you do not want your life artificially supported.

How often should I update my will or any other estate planning vehicle documents?
Your estate planning documents should be reexamined whenever your financial or family circumstances change...such as moving to a new state (new state laws would apply), a marriage or divorce, a windfall or a loss, etc.

Sample Bequest Language
Please contact us for suggested language and for issues to resolve before talking to an attorney. It will save you time and that means saving money.

It is a written legal document (i.e., a trust) that is created by transferring title of personal and real property to a trustee (can be you). It looks a lot like a will and can be changed or revoked like a will.

Some Advantages

• It is a private planning instrument and, therefore, avoids probate. As such it minimizes administrative complications and the time involved in settling the estate.
• It eliminates multiple probates where real property is owned in more than one state.
• In fact, you can choose the state law that will apply to the administration of the trust.
• It is a good way to pass property to a charitable organization and save taxes at death.

Some Disadvantages

• Initial costs and trouble of creation. Property must be transferred to the trust.
• It slightly complicates subsequent dealings with that property.
• At time of termination, there could be fees.
• Because it is revocable, there are no immediate tax advantages.

It is a contract between you and GIFTS whereby GIFTS agrees to pay you a fixed annual income for life in exchange for money or assets transferred to GIFTS through the contract.

Some Advantages

• The most popular planning document apart from a will. A very simple agreement.
• You retain income for life, probably at a higher rate of return than you could get from low-earning securities or CDs.
• You will likely receive part of your income in a tax advantaged way.
• It is non-revocable and, thereby, provides a tax charitable deduction.
• A Deferred Charitable Gift Annuity can be started now and the income delayed until sometime in the future. This can be a true advantage to the annuitant.

Some Disadvantages

• Because the income is fixed, the value of that income may be eroded somewhat by inflation over years.
• Therefore, annuitants younger than 50 may see the buying power of their payments decrease over time.

It is a trust, a separate charitable entity with its own name and tax I.D., in which the “remainder” (whatever remains in the trust after all other terms and conditions have been fulfilled) will be transferred to GIFTS and any other charitable organizations named in the trust. That is, the charity gets the “remainder.” While it sounds a lot like a Charitable Gift Annuity it is vastly more sophisticated than any of the other planning instruments (documents) and allows for a wide range of your charitable and financial objectives.

So, what is a Charitable Remainder Annuity Trust?
This trust pays the beneficiary (annuitant) a fixed dollar amount, not less than 5% of its value nor more than any amount which creates a circumstance that could deplete the trust assets. The dollar amount of payment to the annuitant is fixed at the creation of the trust and will not vary.

And what is a Charitable Remainder Unitrust?
The Unitrust is different from the Annuity trust in that the principal in the trust is revalued every year based on the growth or loss of invested assets. Additional contributions to this trust may be made at any time, unlike the Annuity Trust. The income beneficiary’s payments are based on a fixed percentage of the trust’s value every year. That percentage is determined at the creation of the trust and will not vary.

Some Advantages

• There are current income tax, capital gains, and estate tax advantages.
• The Unitrust is the most flexible life income gift plan available, and can help you meet a variety of charitable and financial goals for yourself and your family.
• An illiquid asset may be given to the Unitrust, like real estate or a privately held business, and it may be held or passively invested and then changed or invested otherwise at a later date.
• Certain trusts can be used to supplement retirement plans or tuition funds, etc., tax-free, until needed.
• A Charitable Remainder Trust can provide steady cash flow to the income beneficiary and can be more favorable than keeping an asset or selling it outright.
• There are additional kinds of Charitable Remainder Trusts that can defer beneficiary payments until a later time, allow for a varied investment policy i.e., for growth or for return.
• Unlike a Charitable Gift Annuity, there can be more than two beneficiaries as well as multiple charitable remaindermen.

Some Disadvantages

• While other planning vehicles are simpler and may not require the services of a lawyer you will not be able to create a Charitable Remainder Trust without a lawyer’s assistance. Wheeler strongly urges the use of professional help in all estate planning.
• Charitable Remainder Trusts are generally for larger gifts and are probably not advantageous to a donor with less than $50,000 to invest in the trust.

1. You can use an existing policy and make it a gift to Wheeler. In this case you should make GIFTS the beneficiary and the owner of the policy in order to take a charitable deduction for its value.
2. You can purchase an insurance policy and make it a gift to GIFTS (see #1 above) and your premium payments are tax deductible. This way you can fulfill your desire to make a larger commitment to GIFTS at your death than you might have been able to do during your lifetime.
3. You can use insurance to facilitate a gift to GIFTS. Insurance can be used to create liquidity or replace wealth for your heirs when you decide to make a substantial gift in some other way. The insurance replacement guarantees that your heirs will not be “disinherited.”

There are at least three ways:

Some Advantages

• Insurance is a popular way to make a sizable gift at a modest cost.
• You can donate a policy, take a deduction, deduct future premium payments, if any, and make an extraordinary gift to Wheeler.
• You’ll also get the proceeds out of your taxable estate.

Some Disadvantages

• You may find that funds donated for an insurance policy may perform better if they are simply invested directly into GIFTS Endowment Fund, unless you do not live to your full life expectancy.
• If you only make GIFTS the beneficiary of your policy but not the owner you will not receive a current charitable tax deduction as it is a revocable gift if GIFTS is not the owner.

A gift subject to life estate is a gift of your personal residence, (primary or vacation residence), or a farm in which you have had an operating interest within the last five years. It is subject to a life estate; that is, you retain the right to personal use and interest in the property for life. Investment property (for example, an apartment complex) does not qualify; however, investment property can be used to fund other life income gift plans.

Some Advantages

• You enjoy a current income tax deduction for the present value of the future gift, and the property is irrevocably deeded to GIFTS.
• You retain the right to lifetime usage; no change in circumstances.
• Lifetime usage may apply to one or more lifetimes or for a term of years.
• The property is removed from your estate for probate procedures, estate disposition problems and taxes.

Some Disadvantages

• All routine expenses – structural maintenance, property taxes, repairs, etc. – are your responsibility until you completely relinquish the property.
• Mortgaged property may introduce difficulties in the transaction and could produce taxable income to you if Wheeler assumes the mortgage.
• You must secure an appraisal for the fair market value of the property to substantiate your claimed charitable deduction. You may also be asked to have an environmental assessment conducted as well.

60%-70% of your retirement assets may be taxed if you leave them to your heirs at your death. Another option is to leave your heirs assets that receive a step up in basis, such as real estate and stock, and give retirement assets to Wheeler Mission Ministries. Here’s how:

• Individuals age 70½ and older may transfer up to $100,000 directly from an IRA to GIFTS.
• That “distribution” or gift counts toward your annual Minimum Required Distribution requirements.

Since the funds in IRA accounts were not originally taxed, the distribution to Wheeler cannot generate a tax deduction. However, because it would otherwise be taxed if you first took the money from your IRA account and then gave it to Wheeler, even taxpayers who don’t itemize their deductions can benefit from making this kind of gift.

Some Advantages

• Because of the combination of taxes avoided it can be one of your best assets to use as a gift to GIFTS.
• Avoid potential estate tax on retirement assets.

Some Disadvantages

• It is considered rather complicated by many people and we believe you should definitely seek the advice of your tax and/or legal counsel before deciding on a course of action.