Planned Gifts

Plan a Gift for the Broward Health Foundation

Many individuals have found gift planning to be an excellent way to provide substantial support for the Broward Health Foundation. Estate provisions often make possible gifts that otherwise could not have been made during one’s lifetime. Moreover, a gift through your estate provides the opportunity to make a major gift while preserving assets during life and allows for a reduction in federal estate taxes. We would be delighted to work with you and your representatives in arranging a gift plan that best suits your objectives.

These following pages will answer some of your questions about planning a gift to the Broward Health Foundation, while providing new ideas about meeting your financial and philanthropic needs.

Make a Bequest to the Broward Health Foundation

Giving to the Broward Health Foundation through your will is one of the simplest ways to make a planned gift. Making a bequest is straightforward and easily executed with your attorney. In addition, a bequest to the Broward Health Foundation can save your estate a significant sum in tax payments if the estate is subject to federal estate tax.

You can name the Broward Health Foundation as a beneficiary in your will in a number of simple ways:

  • If your gift is to be made in cash, you can designate a dollar amount for the Broward Health Foundation, or you can specify a percentage or fraction of your estate. The latter choice provides a hedge against inflation and unforeseen shrinkage while assuring that your heirs receive their proportionate share of the estate.
  • You can name the Broward Health Foundation as the remainder beneficiary of your estate. The Broward Health Foundation would receive the residual amount only after specific sums have been paid to individual beneficiaries.
  • You can make a contingent bequest by naming the Broward Health Foundation to receive certain assets only if a named individual, such as a spouse, doesn't survive you. This offers a way to put a loved one's security first.
  • You can specify a non-cash gift of securities, real estate, or tangible personal property (such as art or antiques).

Gifts of unrestricted funds are the most helpful to the Broward Health Foundation, but you may designate your gift for a specific purpose if you wish.

Give Life Insurance to the Broward Health Foundation

Naming the Broward Health Foundation as owner and beneficiary of a paid-up policy entitles you to either a deduction equal to your cost basis in the policy or its replacement cost—whichever is less. Naming the Broward Health Foundation as owner and beneficiary of a policy that is not paid up provides you with a tax deduction approximately equal to the policy's cash surrender value.

You also may purchase a new policy and name the Broward Health Foundation as owner and beneficiary. By donating the money required for the premium payments directly to the Broward Health Foundation, you receive a full tax deduction for these annual gifts.

Life insurance also can be purchased for you to replace other donated assets. For example, if you made a gift of real estate to the Broward Health Foundation, you could purchase a policy for the amount of this gift to ensure that your family will be taken care of as well.

Give Life Income to the Broward Health Foundation

Family obligations and the need to provide for retirement, coupled with the high cost of living, make it difficult for many people to consider substantial charitable gifts now. However, there is a way to have the satisfaction of making a meaningful lifetime gift without sacrifice. In fact, you can get current income tax and financial benefits. It is called a life income gift. You irrevocably transfer some assets to the Broward Health Foundation now, and, in return, you (and a survivor(s), if you wish) receive income for life. As a result, the assets are used to carry out our mission.

By making a life income gift to the Broward Health Foundation, you will receive the following benefits—in addition, of course, to the pleasure of knowing the reputable work your gift will do. These benefits include:

  • A charitable deduction in the year you make the gift, and in five subsequent years if necessary, for the present value of our right to eventually receive the assets.
  • Your effective yield is increased by substantial income tax savings.
  • The income can be taxed more favorably in some plans.
  • Your probate and estate administration costs may be reduced.

Charitable Gift Annuities

A charitable gift annuity is a contract under which a charity, in return for a transfer of cash, marketable securities or other assets, agrees to pay a fixed amount of money (payment) to one or two individuals (beneficiaries or annuitants), for their lifetime. The contract is between the donors and the issuing charity, where the donors transfer property (cash, securities, and real property) in exchange for a fixed dollar payment during their lifetime. The issuing institution guarantees the income, as it becomes a legal obligation of the charity.

For example, Mr. and Mrs. Blue, both age 70, donate $50,000 in cash to the Broward Health Foundation to fund a charitable gift annuity. For the duration of both of their lives, the annuity will provide them with fixed annual payments of $2,300 (4.6% payout rate). More than $1,800 of this will be treated as tax-free income, and the remaining $500 as ordinary income, annually for the next 20.5 years. After 20.5 years the entire amount will be treated as ordinary income. The Blues’ current income tax deduction will be nearly $13,000, and the Blues have up to six years to use this deduction.

Another example would be Mrs. White, age 65, makes a gift of $50,000 of stock to the Broward Health Foundation to fund a charitable gift annuity with a cost basis of $10,000. For the duration of her life, the annuity will provide her with fixed income payments of $2,350 (4.7% payout rate). Of this amount, $361 will be treated as tax-free income, $1,446 as capital gain income, and $543 as ordinary income annually. Mrs. White’s current income tax deduction will be more than $14,000, and Mrs. White has up to six years to use this deduction. Total reportable capital gain of $28,776 must be reported over 19.9 years, the expected lifetime of a donor age 65. After 19.9 years, the entire annuity becomes taxable as ordinary income.

Charitable Remainder Trusts

This life income plan is created by transferring assets to a trust that pays you (and other beneficiaries, if you wish) or a not-for-profit organization income for life or a number of years. At the end of the trust, the remaining trust assets are either transferred to the Broward Health Foundation, or, in the case of the lead trust, either back to the funder or their heirs. A bank or trusted advisor can serve as trustee.

The type of charitable remainder trust you choose determines your annual payments:

1. Charitable Remainder Annuity Trust

The charitable remainder annuity trust pays you a fixed dollar amount annually for life. The fixed payments are determined by the payout percentage selected at the beginning of the trust. You can claim a charitable deduction on your income tax form the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.

For example: Mrs. Crosby irrevocably transfers $100,000 to create a charitable remainder annuity trust that will provide her with life income payments. Included in the trust agreement is the stated payout percentage of seven (7%). She will receive $7,000 annually for her life ($100,000 x 7%). If income earned by the trust exceeds the fixed payment of $7,000, the excess is reinvested.

2. Charitable Remainder Unitrust

The charitable remainder unitrust pays you a fixed percentage of the fair market value of the trust assets, as revalued each year. Like the annuity trust, you can claim a charitable deduction on your income tax form the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.

For example: Mr. Stills irrevocably transfers $100,000 to create a charitable remainder unitrust that will provide him with life income payments. The trust agreement provides that he will receive six percent (6%) of the fair market value of the assets each year. The first year he receives $6,000 (100,000 x 6%). One year later the trust assets are valued at $120,000, so he is paid $7,200 ($120,000 x 6%). If the trust assets are worth $110,000 at the beginning of the next year, he will receive $6,600 ($110,000 x 6%); and so on each year. If trust income exceeds the stated payout percentage, the excess is added to the unitrust assets and reinvested.

3. Charitable Lead Trust

Under this plan, you irrevocably transfer assets to a trustee and provide that payments be made to us for a certain number of years (or until the end of your or another’s life). Then the principal is returned back to you (Grantor) or distributed to your children, grandchildren, or other heirs (Non-Grantor) at greatly reduced gift-and estate-tax rates and sometimes escapes them altogether.

For example: Mrs. Nash funds a non-grantor lead trust with $1,000,000 and stipulates that this organization is to receive $80,000 per year for fifteen (15) years, after which the remaining principal will be distributed to her two (2) children. She will report a taxable gift of only $202,300. The difference ($1,000,000 - $202,300 = $797,700) is a charitable gift-tax deduction. If she had simply given the $1,000,000 to her children, the entire amount would have been taxable.

Give Real Estate to the Broward Health Foundation

A gift of real estate to the Broward Health Foundation provides you with a charitable deduction for the full fair market value of the gift, up to thirty percent (30%) of your adjusted gross income—if you have held it for more than one (1) year. Any deduction you are unable to use in the first year can be carried over onto subsequent tax returns for up to five (5) additional years. You are not subject to capital gains tax on the appreciated value of the property.

With gifts like artwork and library collections, you will need to have your gift appraised by an independent appraiser to determine the value of your deduction. Gifts of mortgaged real estate may not be appropriate for donation. Please consult with us to make sure your real estate can be accepted by the Broward Health Foundation.

You may give your home or property to the Broward Health Foundation in the form of a life estate gift, and you or anyone you designate may have continuous, uninterrupted use of the property for his or her lifetime. Because you transfer ownership of the property to the Broward Health Foundation, you receive an immediate charitable income tax deduction up to thirty percent (30%) of your adjusted gross income. You may carry over for up to five (5) years any deduction you were unable to use in the year you make the gift. The amount of your deduction is based on the value of the Broward Health Foundation’s future interest in the property. Although you benefit from the charitable deduction, in most cases you continue to be responsible for maintenance and property taxes. As with any gift, removing this property from your estate can also lower your estate taxes and probate costs.

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